The Fed Hasn't Hiked Rates Since 2023. That Changes This Afternoon.

At 2:00 PM ET today, the Federal Reserve is expected to do something it hasn’t done since 2023: raise interest rates. CME FedWatch has the odds at 92% for a 25-basis-point hike, taking the target range to 3.75%–4%. And gold is up on the day anyway.

That’s not a typo. Gold is trading near $4,326 this morning, up roughly 0.8%, clawing back from the low it hit Monday. Silver’s doing the same thing, popping as high as $65.08 before settling back near $64. The market that’s supposed to hate a rate hike is rallying into one. Sit with that for a second, because it’s the actual story today — not whatever the Fed says at the podium.

The Hike Isn’t the News. The Guidance Is.

Here’s the thing about a 92% probability: it’s priced in. Whatever happens at 2:00 PM isn’t going to shock anyone holding gold or silver right now, because everyone already built it into the price. What actually moves the metal is what Fed Chair Kevin Warsh says in the room afterward — specifically, whether he frames this as a one-and-done “insurance hike” or the opening move in something longer.

That distinction is everything. ING’s strategists have been blunt about it: if Warsh signals rates stay “higher for longer,” gold has room to fall further, because a hawkish path means real yields keep climbing and non-yielding metal keeps looking like a worse place to park money. But if he leans on the softer framing — one hike to get ahead of inflation, not a campaign — the metals have already shown you they’ll rally on relief.

This is the same dynamic that’s played out all year: gold and silver aren’t trading the headline, they’re trading the sentence after the headline.

The Setup Nobody’s Pricing Right

Notice what’s propping gold up even with a hike all but locked in: oil. Crude eased off its two-day rally this morning, and that’s arguably done more for gold this week than any Fed commentary. Oil-driven inflation fear is what pushed hike odds from the high-60s to 92% in the first place — cool the oil trade, and you cool the case for a hawkish Fed, even before Warsh opens his mouth.

That’s the actual mechanism worth understanding if you’re buying on a schedule: it’s not gold vs. the Fed, it’s oil vs. the Fed vs. gold, a three-way tug that’s been reshuffling week to week since the pipeline attacks started. The Fed decision is just where all three variables get marked to market at once.

The Bottom Line

Nothing about today’s decision should change what you’re doing if you’re dollar-cost-averaging into physical. The hike is already in the price — that’s what a 92% probability means. What isn’t priced in is the tone, and tone is unknowable until Warsh actually speaks.

If you’re watching one thing this afternoon, watch the dot plot and the press conference language, not the headline rate. A hawkish “higher for longer” framing is the scenario that actually tests gold’s floor. Everything else — the 25 basis points itself — the market decided weeks ago.