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Oil prices plunged overnight, while gold prices rebounded slightly from a near six-week low as the market digested signals of a Fed rate hike. 1. Gold prices rose slightly on Thursday, gaining as much as 1.14% to $4312.69 per ounce, after falling to a near six-week low of $4235.10 per ounce in the previous session. Investors are assessing the Federal Reserve's rate hike decision and signals of potential further tightening of monetary policy. 2. The Federal Reserve announced a rate hike on Wednesday and hinted at possible further tightening in the coming months. This decision was unanimously approved, effectively acknowledging the Trump administration's failure to control inflation to date, with policymakers concerned that inflation could worsen further. 4. Fed Chairman Warsh told reporters that a range of data, including from the labor market, indicates the economy has strengthened, and cited reasons supporting the rate hike. At the July meeting, he had advocated keeping rates unchanged. 5. Rising interest rates typically increase returns on interest-bearing assets, thus diminishing the appeal of gold. 6. Strong rebound in U.S. retail sales in August, with households increasing purchases of various goods and expanding spending at restaurants and bars, further demonstrated the resilience of the economy, despite growing consumer concerns about high inflation. 7. Geopolitically, the Iranian-backed Houthi rebels claimed on Wednesday that Saudi warplanes were heavily bombing Yemen, while the Houthis responded by launching drones and missiles at Saudi cities. This group's rapid advance has expanded Tehran's influence in the Middle East conflict and further disrupted global oil supplies. 8. However, reports indicate that Saudi Arabia is diverting more crude oil through Oman, easing market concerns about disruptions to Middle Eastern oil supplies. Overnight, oil prices fell by more than 3%, slightly easing inflation concerns and pressure for further interest rate hikes by the Federal Reserve. The dollar index's gains slowed on Thursday, providing an opportunity for a rebound in gold prices.