Important Disclaimer: This article only sorts out market information and conducts macro logical analysis. It does not constitute any investment advice. Market volatility carries extremely high risks. Please make independent and prudent decisions.

The global precious metals market is currently in a typical window of bull-bear confrontation. The short-term trading main line revolves entirely around the interest rate hike expectations for the Federal Reserve’s September FOMC meeting. By contrast, the medium and long-term pricing logic is anchored by two major pillars: continuous gold purchases by global central banks, the massive federal debt pressure of the United States, and concerns over US dollar credit arising from geopolitical conflicts. The rebound in short-term inflation data has pushed up the real yield of US Treasury bonds and suppressed gold prices. Nevertheless, sustained long-term buying support means institutions generally define the current gold price pullback as a phased adjustment within a bull market rather than a trend reversal.

I. Review of Latest Macroeconomic Data: Inflation Rebound Reshapes Fed Policy Expectations

On the evening of September 10 (Beijing Time), the U.S. Bureau of Labor Statistics released the August Producer Price Index (PPI). This report has directly reshaped market pricing for the Fed’s September policy and became the trigger for the sharp drop in precious metals this week. The data shows that the U.S. final demand PPI rose 5.4% year-on-year in August, exceeding the market consensus forecast of 5.3%, compared with the previous reading of 4.7%, marking a notable jump in the year-on-year growth rate. The month-on-month increase stood at 0.4%, the largest monthly month-on-month gain since May this year. After excluding volatile food and energy components, the core PPI rose 4.6% year-on-year and 0.2% month-on-month, slightly below the market expectation of 0.3%. This indicates a marginal cooling in service-side inflation, yet upward inflation pressure brought by energy items cannot be ignored.

The core driver behind this PPI uptick lies in the energy sector. Fueled by heightened geopolitical tensions in the Middle East, international crude oil prices kept surging. New York crude oil once broke above $100 per barrel during intraday trading. Diesel prices posted a sharp monthly gain, while gasoline, jet fuel, heating oil and other categories strengthened simultaneously. Rising energy prices transmitted upstream along the industrial chain, directly lifting price levels on the producer side. The rebound in upstream PPI raises market fears that such price pressures will gradually pass through to end consumer goods, creating stickiness and a rebound in consumer-side CPI inflation — a risk the Federal Reserve fears most.

In addition, the synchronously released U.S. initial jobless claims data also came in strong. For the week ending September 5, initial claims for unemployment benefits edged down to 206,000, and continuing claims fell to 1,774,000. This reflects that the U.S. labor market remains resilient without obvious signs of deterioration. Robust employment data means the Federal Reserve has greater room to maintain high interest rates or even implement additional rate hikes to curb inflation; the labor market is no longer a constraint preventing the Fed from tightening policy.

After the data release, interest rate pricing on the CME FedWatch tool adjusted rapidly: the market-implied probability of a 25-basis-point rate hike at the September FOMC meeting quickly climbed to around 70%, while the probability of keeping rates unchanged dropped to 30%. Meanwhile, trading markets began to price in the possibility of another rate hike in October, with the relevant probability rising to 82.1%. The US Treasury market reacted violently in tandem, with the entire Treasury yield curve shifting upward. The 2-year US Treasury yield rose 13 bps to 4.56%, the 10-year yield climbed 12 bps to nearly 4.95%, and the 30-year long bond yield increased 9 bps to 5.37%, with long-end yields hitting multi-year highs.

Gold is an interest-free asset, and its core pricing variable is the US dollar real interest rate (nominal US Treasury yield minus inflation expectations). When the market raises rate hike expectations and nominal US Treasury yields surge sharply, the opportunity cost of holding gold rises markedly. Capital tends to flow out of precious metals and into high-yield US Treasuries. Hit by this shock, the COMEX December gold futures fell sharply by $88.7 on September 10, closing at $4,358.5 per troy ounce, with a single-day decline of nearly 2%. London spot gold also faced concentrated selling pressure, dipping below $4,350 intraday and touching a low near $4,328, with an intraday maximum pullback exceeding $120. The US Dollar Index rebounded above the 99 level at the same time, further pressuring US-dollar-denominated international gold and amplifying bearish forces on the market.

The most important heavyweight data of this week will be released at 20:30 Beijing Time on September 11: the U.S. August CPI and core CPI. This is the final core inflation report available to the Fed before the FOMC meeting and will directly determine the voting inclination of committee members. Current market consensus forecasts: headline August CPI to rise 0.4% month-on-month and 3.4% year-on-year; core CPI to increase 0.2% month-on-month and 2.5% year-on-year. Fed Governor Waller previously stated clearly that the month-on-month core CPI reading serves as the core basis for his vote. If month-on-month core CPI exceeds 0.2%, he will tend to support a rate hike; if it falls below that level, he favors keeping rates on hold. Should tonight’s CPI print above expectations, rate hike probabilities will climb further, and gold will face deeper near-term corrections. If inflation comes in lower than expected, market rate hike expectations will cool rapidly, and gold prices may stage a short-term recovery rebound.

II. Review of Recent Remarks by Fed Officials: Deep Divisions within the Committee, Intense Clash Between Hawkish and Dovish Views

Opinions within the FOMC committee are evidently split at present, a fact already reflected in the voting results of the July policy meeting. At the July meeting, the Federal Reserve kept the federal funds rate unchanged in the 3.50%-3.75% range. The final vote stood at 9:3, with three regional Fed presidents casting dissenting votes and advocating an immediate 25-basis-point rate hike. Hawkish voices hold non-negligible sway on the committee.

Hawkish Representative: Fed Chair Walsh, Jackson Hole Global Central Bank Symposium (Late August)

This Jackson Hole symposium marked the turning point where gold prices shifted from rally to pullback in this round. In his keynote speech, Walsh delivered a tough tone in the fight against inflation, explicitly emphasizing that the Fed will not compromise on the 2% inflation target. He stated that if subsequent economic data fail to prove that underlying inflation can fall persistently and credibly toward 2%, the Fed “has more work to do” and will not rule out restarting rate hikes, nor will it prematurely declare the anti-inflation mission complete.

This speech rewrote market expectations directly. The probability of a September rate hike jumped from 35% to 57%, and London spot gold plummeted nearly 3% on the day, retreating rapidly from the stage high of $4,631 and launching this round of deep correction. Walsh’s core reasoning is that although inflation has declined over the past period, the pace of the decline remains relatively slow. Rebounding energy prices bring fresh upside risks, and the Fed cannot ease monetary policy prematurely. It must maintain restrictive policy to prevent a secondary rebound in inflation.

Dovish-leaning Representative: Fed Governor Waller (Public Speech on September 3)

Waller struck a relatively moderate tone, becoming a signal for a temporary breather for market bulls. He argued that if upcoming inflation data continue to cool, he personally tends to keep interest rates unchanged at the September FOMC meeting. Yet he also reserved policy options: should inflation data rebound, supporting a rate hike would be an appropriate policy choice. He pointed out that core inflation over the past three months has shown notable improvement. The annualized three-month core inflation dropped from 4.76% in February this year to 3.05% in July. This improvement deserves recognition, but it remains distant from the 2% target and cannot be taken lightly.

Synthesizing remarks from all officials, the Federal Reserve is currently adopting a data-dependent policy framework. It will not lock in a fixed interest rate path in advance, and every decision relies heavily on the latest inflation and employment data. Simply put, there is no preset timetable for rate hikes or cuts. The Fed tends to tighten when inflation rises and stays put if inflation cools persistently. Such uncertainty amplifies short-term volatility in assets such as gold and US Treasuries.

Separately, the European Central Bank announced a 25-basis-point rate hike on September 10. The broader backdrop of tightening among major global central banks also reinforces expectations for a global high-interest-rate environment, weighing on precious metal assets indirectly.

III. In-depth Breakdown of Gold Pricing Logic: Fed Rate Expectations Dominate Short-term Moves; Central Bank Gold Purchases and US Debt Drive Medium-to-Long-term Trends

Many market participants simply equate gold prices with Fed rate hikes or cuts, but the complete gold pricing system falls into three layers. The Fed real interest rate is merely the first layer of short-term logic, while the other two independent supporting factors determine the medium and long-term bottom.

Layer 1: US Dollar Real Interest Rate (Short-term Dominant Factor) Gold generates no interest or cash flow at all. The opportunity cost for investors holding gold is the real yield of US Treasury bonds.

1. When the Fed sends hawkish signals and the market raises rate hike expectations, nominal US Treasury yields rise, pushing real interest rates higher. The opportunity cost of holding gold increases, capital flows out of gold, and gold prices come under pressure and fall — the market scenario unfolding right now.
2. When inflation surges rapidly while the Fed keeps rates steady, nominal yields remain unchanged, real interest rates decline, gold’s appeal rises, and capital inflows push gold prices higher.
3. If the Fed enters a rate-cut cycle, nominal yields fall, which also drags real interest rates lower and benefits gold.

The US Dollar Index acts as a secondary variable. Rate hike expectations lift the US dollar, which directly weighs on US-dollar-denominated international gold. Conversely, rate-cut expectations suppress the US dollar and benefit gold. That said, under extreme risk-off scenarios, the US dollar and gold may rise simultaneously, an exception requiring attention.

Layer 2: Sustained Gold Purchases by Global Central Banks (Core Medium-to-long-term Support) This is the bottommost support for the major gold bull market from 2025 to 2026, and will not reverse simply due to a single potential Fed rate hike. According to official surveys and statistics released by the World Gold Council, net gold purchases by global central banks reached 288.9 tonnes in Q2 2026, surging 62% year-on-year and hitting a new high for any second quarter on record. The willingness of global reserve managers to increase holdings stands at historic highs. 89% of surveyed central banks expect total global official gold reserves to rise over the next 12 months, and 45% plan to increase gold holdings in the coming year, the highest proportion on record.

In terms of reserve structure, by the end of 2025, gold’s share in global official foreign exchange reserve assets rose to 27%, surpassing US Treasuries to become the largest asset category in global official reserves. Multiple central banks continue to diversify their reserve portfolios, reduce reliance on US dollar and US Treasury assets, and hedge against risks to reserve assets stemming from US dollar asset fluctuations and geopolitics. The People’s Bank of China has increased gold holdings for 22 consecutive months. Poland, Kazakhstan, Malaysia and other emerging market central banks also keep making large gold purchases.

Central bank gold buying represents rigid long-duration buying orders. Unlike speculative capital, such orders are unaffected by short-term gold price swings. Central banks buy continuously in line with reserve allocation plans whether gold rises or falls, providing solid bottom support when gold prices plunge rapidly and limiting downside space. This is the key reason why there has been no crash-style drop during the current gold price correction.

Layer 3: US Fiscal and Debt Risks (Ultra-long-term Underlying Logic) The gross US federal public debt has exceeded $40 trillion. Persistently widening fiscal deficits bring massive interest payment burdens. With interest rates staying elevated for a long time, annual interest expenses on US government debt keep climbing. Markets have long worried about the sustainability of US debt. From a medium-to-long-term perspective, massive debt will erode US dollar credit, prompting markets to increase allocation to gold, an asset free from sovereign credit risk. This constitutes the long-cycle bullish logic for gold.

At the same time, superimposed geopolitical conflicts in the Middle East generate periodic safe-haven demand. Geopolitical risks may trigger episodic safe-haven buying in gold, partially offsetting bearish pressure from rate headwinds and leading to repeated volatile price action.

A simple summary of the relationship between the three factors: Fed rate expectations determine the rhythm of short-term gold price swings; central bank gold purchases define the bottom range of gold prices; US debt and US dollar credit shape the long-term upward megatrend for gold. Short-term bearish factors can trigger corrections, yet they are unlikely to directly end the current gold bull market.

IV. Four Scenario Simulations for the September 15–16 FOMC Meeting and Gold Price Projections

This FOMC meeting is the most suspenseful policy gathering of 2026. Apart from the interest rate decision, the Fed will release updated quarterly dot plots and the latest Summary of Economic Projections. Chair Walsh will hold a press conference afterward. The dot plot and the chair’s remarks often exert a larger market impact than the 25-basis-point rate adjustment itself, as markets trade on the expectation gap for the future interest rate path rather than the resolution itself.

Scenario 1: 25bp rate hike + hawkish dot plot and hawkish chair remarks (baseline market scenario, probability 70%)

• Policy outcome: The federal funds rate is raised to 3.75%-4.00%; the dot plot lifts the interest rate median, with wording retaining scope for additional rate hikes within the year; the press conference emphasizes inflation risks remain unresolved and further hikes cannot be ruled out.
• Short-term gold price action: US Treasury yields and the US Dollar Index surge, gold faces a rapid pullback, with primary support at the $4,300 level. Under extreme sentiment, gold may test support near $4,250.
• Medium-to-long-term evolution: If Walsh explicitly states this rate hike is a one-off precautionary tightening and does not mark the start of a sustained hiking cycle, the market will likely stage a “sell the rumor, buy the fact” rebound after the bearish news is priced in.

Scenario 2: Rates kept unchanged, policy statement hawkish in tone with option reserved for future hikes

• Policy outcome: Rates stay within 3.50%-3.75%, yet the statement stresses upside inflation risks; the dot plot maintains high interest rate expectations, clarifying further hikes remain possible if inflation rebounds.
• Short-term gold price action: Market rate hike expectations cool rapidly, US Treasury yields fall, and gold stages a corrective rebound, with the first resistance level near $4,450.

Scenario 3: Rates kept unchanged, overall dovish remarks, dot plot lowers interest rate expectations, signal that no more hikes this year

• Policy outcome: Rates remain unchanged, the Fed acknowledges the trend of improving inflation; the dot plot cuts the terminal rate forecast, and Walsh’s press conference strikes a cautious tone, hinting at a pause in the hiking cycle going forward.
• Short-term gold price action: Bullish sentiment surges, gold rebounds strongly and has the potential to retake the $4,500 threshold and open upside room.

Scenario 4: 25bp rate hike paired with dovish remarks, stressing this hike will likely be the final tightening move

• Policy outcome: A 25bp hike, yet collective signals from officials indicate this will likely mark the end of the hiking cycle, with future moves dependent on inflation developments and no further tightening pre-emptively scheduled.
• Short-term gold price action: An initial drop followed by a rapid digestion of bearish news and a V-shaped reversal, a classic “buy the rumor, sell the fact” market reaction.

Key Note: The dot plot represents the biggest variable for this meeting. It reflects collective forecasts for future interest rates from all FOMC voting members. Even if interest rates remain unchanged, a dot plot upgrading future rate expectations will still be interpreted by the market as hawkish and weigh on gold prices.

V. Summary of Mainstream Global Institutional Views

1. Goldman Sachs: Maintains its end-of-year gold price target of $4,900 per troy ounce unchanged. Goldman Sachs’ analyst team argues that sustained central bank gold purchases remain the core pillar supporting gold prices. Short-term corrections brought by Fed rate hikes serve as allocation windows for medium and long-term positioning. It also warns that speculative capital in gold derivatives is highly volatile and will amplify short-term swings in gold prices.
2. Barclays Bank: Revises its previous forecast, predicting the Fed will raise rates by 25bp each in September and December, lifting the US Treasury yield median and cutting the near-term gold price target. It believes upward rate pressure will weigh on precious metals, warranting caution in the short run.
3. Kyle Roda, Analyst at Capital.com: The current inflation rebound stems mainly from energy supply shocks. Rate hikes alone can hardly fully suppress energy-side inflation. Inflation stickiness will keep uncertainty over the interest rate path elevated, amplifying gold price volatility and bull-bear confrontation.
4. Macro and non-ferrous teams at domestic securities firms: Consensus view is short-term bearish, long-term bullish. In the short run, gold prices remain weak and range-bound amid Fed rate hike expectations, vulnerable to rapid pullbacks triggered by CPI and FOMC news. However, the two underlying supporting logics — central bank gold buying and high US debt — remain intact. Deep corrections present medium-to-long-term allocation opportunities, and blind shorting is not recommended.

VI. Market Prices and List of Key Indicators to Monitor (Intraday, September 11)

Current Prices of Major Instruments

• London Spot Gold: $4,328.91 per troy ounce
• COMEX December Gold Futures: around $4,358 per troy ounce
• Shanghai Gold Main Continuous Contract: 937.6 yuan per gram
• Gold T+D: 935.9 yuan per gram

Subsequent Key Indicators to Track (Determine Short-term Market Direction)

1. U.S. August CPI (20:30 Beijing Time, September 11): The most important leading data this week, directly impacting FOMC voting; focus on month-on-month core CPI.
2. Real yields on the 2-year and 10-year US Treasuries: The most critical real-time leading indicator for gold; rising yields weigh on gold while falling yields benefit gold.
3. Intraday fluctuations in the US Dollar Index.
4. Middle East geopolitical news and international crude oil prices; energy prices directly affect subsequent inflation expectations.
5. Real-time changes in CME FedWatch rate hike probabilities to observe shifts in market expectations.
6. Global gold ETF capital flows to monitor increases or reductions in speculative long and short positions.
7. Monthly gold reserve updates from various central banks to track the sustainability of long-duration buying power.

VII. Market Risk Reminder

The market is currently in a high-volatility event window. Data releases and Fed remarks can easily trigger sharp intraday surges and crashes in gold, increasing the difficulty of stop-loss execution. Even with a bullish long-term view on gold, pullback risks triggered by reversals in short-term macro expectations cannot be overlooked. Meanwhile, geopolitical conflicts can erupt suddenly and trigger episodic safe-haven rallies, breaking the rate-driven market rhythm and further amplifying price volatility.