By: Rhona O'Connell, Head of Market Analysis
Rhona O'Connell, Head of Market Analysis, EMEA & Asia
Tel: +44 203 580 6115 / mobile +44 7384 833897
21st September 2026
The Fed hiked the fed funds target rate by 25 points, as expected; gold took it all in its stride; still seeking direction and caught between key moving averages
As we noted a couple of weeks ago, the World Gold Council has put central bank net buying at a record 289t in the second quarter, roughly five times that of the first, and the People's Bank of China had extended its run of consecutive monthly reported additions to nineteen months as of May. Meanwhile the news that the Netherlands has shifted 56t of gold from the States into London, reportedly on fears of asset freezing in the US (and following French selling US-located holdings and buying in Europe), has caught the headlines. This was done via an effective location swap, selling New York and buying London, rather than physically shipping metal.
The key points of attention are still the Gulf and the Fed. The latter is rather clearer than the former.
The Fed hike was the first since July 2023, at the end of the tightening in the face of post-COVID inflation. The vote was unanimous. Officials also signalled another hike likely this year and adopted a "higher for longer" message via the dot plot – to which Chair Warsh, as in the June meeting, did not contribute.
Silver’s immediate support $62; medium-term body of support is between $54.80 and $60.15
Source; Bloomberg, StoneX
Gold's reaction was muted, partly because the hike was already priced in, while bond yields eased slightly, which seems counter-intuitive, but essentially reflected the feeling that peak inflation fears were softening.
Meanwhile the Saudi Arabian pipeline had been closed on 11th September after a drone attack thought to come from Iranian-backed militias, removing a route that takes crude to the Red Sea rather than through the Strait of Hormuz. This had boosted oil and, with it, inflation expectations that had been supporting gold. Restoration has been quicker than expected, with roughly half the capacity of its damaged East-West pipeline coming back within days, and full operations are now expected to be up and running in six weeks. Brent crude fell for a third consecutive session and this outweighed fears of a broader escalation in the Middle East. This, combined with the suggestion that peak inflation fears were abating, helped to give gold a boost on Friday as Brent slipped towards $100, but we are still in a holding pattern, with President Trump to meet Chinese Premier Xi this week and there is also the possibility of high level talks between US and Iranian officials this week, set against the backdrop of the UN General Assembly in New York.
Note the continued correlation between Brent and the ten-year yield as they both respond to Gulf developments
Source: Bloomberg, StoneX
Silver activity was similar to that of gold, although the volatility was higher.- but not by much. Ordinarily silver’s volatility is between 2.0 and 2.5 times that of gold; this time gold traded a 3% range and silver, 5% so on that historical basis its action was relatively contained. The key difference was the slippage in the face of the Fed’s hike, suggesting that silver was looking at its industrial characteristics (remember 70% of pre-investment fabrication activity is industrial) as it fell from $64.5 to $62.3; the rebound on Friday took silver up to $67.1 before some profit taking set in.
Key long bond yields, long-term and the 5Y-30Y spread; yield curve continues to ease
Source: Bloomberg, StoneX
The Private Credit sector
We noted a fortnight ago that “we continue to keep an eye on the private credit sector, which is catching increasing interest from the press. The FT has noted that after the global financial crisis, authorities clamped down on “duration mismatch” (banks borrowing short term and lending long. This, incidentally, is effectively what the US Treasury is doing in its expanded buyback programmes that got underway on 9th September for eight weeks). The FT points out that some of that activity shifted into the private banking sector and the way that this has evolved has brought some life assurance companies onto the scene and suggests that the continued geopolitical issues and persistent inflation mean that a rise in credit defaults may result. The most recent development is the emergency funding of A$3.4Bn (US$2.5Bn) for the insolvent Australian builder Bathla, which has put pressure on Australian real estate and private credit markets”.
Since then the fed funds rate hike has increased the pressure on some stressed elements in the sector, as most private credit is floating rate and so, while reaping the rewards in terms of interest earnings, borrowing costs also rise, and many of these companies are leveraged, which adds to the risk. Fitch has now raised its Private Credit Default Rate to a record 6.3% for the twelve months ended August, while several large funds are capping redemptions at 5%, against redemption requests ranging from 11% to 16%.
Inventories, ETFs
Gold COMEX registered and eligible stocks together edged up by 1.1t, or 0.13% over the week, to 851.7t as at 18th September, while the ETPs did rather more of the running, adding 11.5t over the same seven days to close at 3,122.5t, a gain of 0.37%. That is a quietly constructive picture, although it sits a little awkwardly against the positioning data, where managed money trimmed its net long by 5.8t to 414.0t in the week to 15th September; the reduction was not a fresh bearish bet, though, since the gross short was cut by 4.8t to 28.9t at the same time as the gross long came down by 10.6t, which reads as lightening rather than turning.
Silver told a busier story. COMEX stocks fell by 222.7t, or 2.12%, to 10,266.7t, with the drawdown running steadily through the week rather than arriving in a single day, and the ETPs lost 126.8t, or 0.51%, to 24,850.2t. Managed money was the sharpest mover of the three, cutting its net long by 201.2t, some 8.6%, to 2,146.8t as at 15th September, and here the gross figures are less benign than in gold, the long shedding 151.6t while the short was built up by 49.6t. Bear in mind that these numbers date from last Tuesday and thus precede the FOMC meeting conclusion.
Source: CFTC/Bloomberg, StoneX
Source: Bloomberg, StoneX
Source: CFTC/Bloomberg, StoneX
Source: Bloomberg, StoneX
The S&P, gold and copper; S&P/gold correlation steady at 0.26 while S&P:Cu correlation is easing; latest at 0.50
Gold:silver ratio
Source for above charts: Bloomberg, StoneX
| 21 September 2026 | Previous week | % change | Year-to-date | Range Jan 2024 onwards | Range as % | ||
| Min | Max | ||||||
| Gold (pm LBMA price) | 4,365.24 | 4,299.64 | 1.53% | 0.76% | 3,976.50 | 5,417.21 | 36.23% |
| Silver (LBMA price) | 58.66 | 62.05 | -5.47% | -23.41% | 57.42 | 116.70 | 103.25% |
| Platinum (pm LBMA price) | 1,629.94 | 1,632.90 | -0.18% | -28.41% | 1,552.52 | 2,054.12 | 32.31% |
| Palladium (pm LBMA price) | 1,271.77 | 1,271.28 | 0.04% | -25.94% | 1,171.57 | 2,054.12 | 75.33% |
| S&P 500 | 7,650.50 | 7,656.98 | -0.08% | 11.76% | 4,688.68 | 7,798.99 | 66.34% |
| $:€ | 1.1486 | 1.1599 | -0.97% | -1.99% | 1.0244 | 1.2041 | 17.54% |
Source: Bloomberg, StoneX
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