Fed Hikes Rates but Gold Holds Firm Amid Debt Worries

Last week the Fed lifted rates by 25 basis points. Chair Kevin Warsh reaffirmed the commitment to curbing inflation. Despite the hawkish tone, gold stayed above $4,300 an ounce and ended a three-week losing streak.

Investors are now focusing on America’s fiscal strain rather than monetary tweaks. With debt above $40 trillion and annual interest costs already exceeding $1 trillion, higher rates only worsen the burden.

Gold is increasingly seen as protection against fiscal deterioration, persistent inflation, and geopolitical risks. Central banks keep buying the metal for its lack of counterparty exposure. This explains why prices held support even with 10-year yields near 5%.