Gold Defied the Fed's Rate Hike—These 3 Plays Stand Out

Gold and interest rates tend to move in opposite directions. Higher interest rates are bullish for the dollar, raising the appeal of yield-bearing assets like bonds, making gold, which pays no yield, less attractive. Gold's initial reaction to the Fed's latest rate hike followed the old script almost perfectly. Spot prices fell more than 1% in the hours after the decision, as a stronger dollar and higher Treasury yields did exactly what the textbook says they should. But investors should note that while gold flinched, it bounced back. As evidence of that reversal, the spot price of gold is up about 1.5% since the post-announcement dip as of this writing.

Many investors have heard that central banks continue to add to their gold reserves. Several countries are also taking steps to repatriate their gold. That means they want to ensure that the gold they own is domiciled in their own country. China's buying supports that case with hard data. Chinese gold imports topped 1,000 metric tons through August, already surpassing all of 2025. That's not a hedge fund chasing momentum. It's a foreign government making a structural bid for gold that doesn't care what the Fed dot plot says next. This has been taking place over the last several years. The question is why? The simple answer is that countries are "dumping" their U.S. dollars. But the evidence doesn't support that. It's more about mitigating counterparty risk. Physical gold can't be sanctioned or frozen. But that doesn't let the dollar off the hook completely. The national debt of the United States recently topped $40 trillion. The debt was concerning before, but large round numbers have a way of crystallizing a problem. Many investors believe, and probably accurately, that the dollar is the best house in a bad neighborhood. It's still fair, though, to wonder how safe U.S. Treasuries will remain. The bottom line: there's a case for gold. For investors who want exposure to this dynamic rather than just an opinion about it, three names capture different pieces of the thesis: a pure operating play on the metal, a royalty business that sidesteps mining risk, and a supply-driven angle in silver.

Newmont Corp. NYSE: NEM is the largest gold miner by production, making it the most direct way to bet that gold will hold its ground against a hiking Fed. That's also its risk. Newmont's earnings are leveraged to the spot price, so a sustain...