Today gold interrupted a two-day decline and gained about 1.1%, rising above $4,340 per ounce. The market still prices roughly a 93% probability of a rate hike after hotter-than-expected inflation data last week. Higher rates are usually negative for non-yielding gold, so easing of the oil factor, rather than doubts about the Federal Reserve decision, gave the metal room to bounce.

Ten-year US Treasury yields retreated slightly after reaching near-two-decade highs. Two-year yields, which are more sensitive to near-term rate moves, also eased a bit — and it is precisely this retreat, not the headline probability of a hike, that relieved some pressure on gold. The market reacts not to the fact of a rate rise, which is largely priced in, but to the smallest signals about the subsequent path.

Yes, traders expect the Fed's first rate hike since 2023 today, but if the central bank refrains or Chair Kevin Warsh fails to give a clear signal of further hikes, investors may demand even higher long-term yields as protection against inflation — a development that could help gold continue higher. Conversely, if the Fed leaves the door open for continued tightening, gold would become more vulnerable and could head toward $4,000 per ounce if the key support at $4,250 is breached.

Many investors still bet that gold will regain momentum as a traditional portfolio safe haven, so this correction looks more like a pause within a broader uptrend than its end.

In my view gold's reaction to the rate hike itself will be secondary to Warsh's tone: if the statement is neutral or leaves room for pausing later, the metal could hold above $4,340 and move back toward August levels; a clear signal of continued tightening could quickly push price toward $4,000.

Technical picture: buyers need to take the nearest resistance at $4,372 to target $4,424, above which a breakout would be difficult. The next target is around $4,481. On the downside, bears will try to take control of $4,304; if they succeed, a range breakout would hit bulls hard and send Gold toward the $4,249 low, with the prospect of extending to $4,186.