On 16 September 2026 the Federal Reserve raised its target range by a quarter point to 3.75% to 4.00%. The vote was unanimous. It is the first increase since 2023, and the projections published alongside it were harder than the hike itself.
Gold finished that session higher. Below is what the decision actually said, why the textbook reaction failed to arrive, and what a UK investor holding Capital Gains Tax free coins should take from it.
Where gold actually is today
Gold is $4,373.40 per troy ounce (£3,272.32) as at 18 September 2026.
That is 21.8% below the record of $5,589.38 set on 28 January 2026, and roughly 19% higher than a year ago. Both of those are true at the same time, and the rest of this piece only makes sense if you hold both in mind.
What the Fed actually did
- A quarter point rise to 3.75% to 4.00% on 16 September 2026, agreed unanimously. The July meeting had split 9 to 3, with three regional presidents pushing for an earlier move.
- Of the 18 officials who submitted projections, 12 pencilled in one more quarter point before year end and four pencilled in a further half point. Two saw no more increases in 2026.
- That is 16 of 18 expecting rates higher still this year.
Futures markets had the hike itself at 83% to 85% probability going in, so the move was largely priced. The signal about what comes next was the new information, and it was hawkish.
What was supposed to happen
The relationship most investors were taught is a simple one. Gold pays no income. When interest rates rise, the return available on cash and government bonds rises with them, so the cost of holding an asset that yields nothing goes up. Rates up, gold down.
On that logic, a first hike in three years, delivered unanimously, from a committee signalling more to come, should have taken gold down hard.
What happened instead
Gold went into the decision having already gained on the day, rising from $4,294 to an intraday high of $4,368. Half an hour after the announcement it sat at $4,306, up 0.3%. It gave back the morning's enthusiasm and kept the day.
The week beforehand is the more interesting part. Exchange traded funds took in close to $2bn over the five trading days ahead of the meeting. Money moved toward gold in front of a rate rise rather than away from it.
Why the old rule stopped holding
The textbook relationship assumes the marginal buyer of gold is a Western investor weighing it against a Treasury yield. That has become less true every year for most of a decade.
Central banks bought more than 1,000 tonnes in each of 2022, 2023 and 2024, and 863 tonnes in 2025. That is roughly a quarter of everything the world's mines produce, taken off the market each year by buyers who are not comparing gold with a bond yield at all. In the second quarter of 2026 Poland added around 51 tonnes and China around 33 tonnes, its largest single quarter since late 2023.
A reserve manager moving a national balance sheet out of foreign government debt and into metal held in their own vault does not revisit that decision because the Fed moved 25 basis points. Neither does someone holding coins for their children. When the largest buyer in the market is indifferent to the policy rate, the policy rate stops setting the price on its own.
The part that does not fit a bullish headline
Gold sits more than a fifth below its January record. An asset in a drawdown of that size is not currently doing the job of protecting a portfolio through every storm, and presenting this week as evidence that it is would be dishonest.
What happened is narrower and more useful than that. The price found support at the exact moment the textbook said it should not. That tells you something about who holds gold now and why, which lasts longer than any single week's move.
The bank forecasts have held too. Goldman Sachs is at $4,900 for year end, JPMorgan $4,500 for the fourth quarter, HSBC a $4,560 average and Bank of America $4,360. Each of those sits at or above today's price, and each survived a hawkish Fed unchanged.
Forecasts move regardless. Goldman cut that same target from $5,400 to $4,900 in June, a $500 revision inside a quarter, when its economists pushed expected US rate cuts out to 2027. Rates have now gone the other way entirely and the target has stayed where it is. We went through that forecast in detail here.
What it means if you hold coins
Rate decisions are noise at this timeframe
If you hold Sovereigns or Britannias, your holding period runs in years or decades. A quarter point in September, and probably another before Christmas, does not change the reason you hold them.
The floor matters more than the ceiling
2026 has delivered a record high in January, a fall of roughly a quarter by June and a partial recovery since. Anyone who bought at the top and needed the money in June had a difficult year. Anyone holding across a decade barely registered it. Physical coins suit the second timeframe, and that is how we talk about them.
The UK tax position is unaffected by any of it
Gold Sovereigns and Britannias are legal tender in the UK, so gains on them are free of Capital Gains Tax, and investment grade gold carries no VAT. At today's spot the gold in a full Sovereign is worth about £770.37 and a one ounce Britannia about £3,272.32. From April 2027, cash held in ISAs faces a charge on interest for the first time, which turns the comparison between taxed and untaxed holdings into a live question for a lot of savers. We covered that change here.
The short version
The Federal Reserve raised rates, said it expects to raise them again, and gold closed higher. That does not make gold a one way bet, and at more than a fifth below January's record it plainly is not one. It does suggest that what moves the gold price now is who is accumulating it, rather than what the Fed did on a Wednesday afternoon.
Book a call with a Bullion Club specialist to talk through what this environment means for your holding. Ask anything, decide nothing on the day.
Gold can fall as well as rise, as 2026 has demonstrated clearly. Forecasts from banks are opinions and are revised regularly. Past performance is not a guide to future performance, and nothing here is personal financial advice. Tax treatment depends on individual circumstances and may change.
