Disclaimer: This article is only a compilation of market information and objective market commentary, and does not constitute any investment advice. Precious metal, foreign exchange and futures markets are highly volatile, and leveraged trading carries extremely high risks. Please participate rationally and manage risks properly.

I. Latest Federal Reserve Policy Overview and Interpretation of Official Speech Signals

At the FOMC policy meeting held in mid-September, the Federal Reserve delivered a 25-basis-point rate hike, lifting the federal funds rate to 3.75%-4.00%. This marked the first resumption of tightening by the Fed in nearly three years. The overall tone released at this meeting leaned hawkish, and the dot plot published afterwards showed a notable upward shift: among the 18 FOMC members, 12 believed that one additional 25-basis-point rate increase would be needed within 2026, meaning two total hikes for the whole year. Regarding the interest rate path for 2027, divisions among committee members widened further. Some members argued that inflation stickiness would persist, leaving room for further rate increases in 2027 if necessary.

Fed Chair Walsh stated at the post-meeting press conference that inflation in the United States is receding far more slowly than the policy target, and a stable achievement of the 2% inflation objective has not yet been observed. U.S. household consumption, corporate investment and the labor market all demonstrate strong resilience. The Fed will not shift to easing prematurely and retains the option to continue tightening monetary policy.

This week, Fed officials have delivered a string of public remarks, with clear internal divergence that has directly disturbed global interest rate expectations and gold pricing. Markets have focused closely on the speech by New York Fed President Williams (FOMC voting member and the Fed’s third-ranking official), whose dovish-leaning remarks became the core trigger for the current gold rebound. Williams said that the Fed completed a rate hike in September, and there is no urgent need to roll out another round of tightening at present. The Fed can remain patient and wait for more inflation and employment data to assess whether further policy tightening is required. Nevertheless, he did not completely rule out the possibility of another rate increase within the year. If inflation rebounds later, an additional hike would still be an appropriate policy option late this year. He also provided economic scenario projections, forecasting U.S. full-year GDP growth of roughly 2.25% in 2026, with year-end inflation falling to 3.5%, and inflation unlikely to return to the 2% target range until 2028, indicating a prolonged inflation cooling cycle.

Meanwhile, multiple hawkish officials have continued to issue warnings. Fed Governor Barr mentioned that U.S. inflation has remained above the 2% target for five and a half consecutive years. Rising energy prices stemming from Middle East conflicts and increased capital expenditure driven by AI expansion will continue to create upward inflationary pressure. Without clear evidence that inflation is on a sustained downward path, the Fed still has room for further rate hikes. St. Louis Fed President Musalem and Chicago Fed President Goolsbee added that policymakers must avoid sending easing signals too early, which could lead markets to misjudge the outlook and lift inflation expectations, undoing previous achievements in fighting inflation.

Mixed remarks from officials have directly altered market pricing for rate hike probabilities. According to CME FedWatch data, prior to Williams’ speech, market pricing of a 25-basis-point hike at the October FOMC meeting once climbed to 70%. After his speech, the market quickly trimmed rate hike expectations, with the probability falling to around 50%. Long-end U.S. Treasury yields retreated from recent highs, and the U.S. Dollar Index came under pressure and weakened. Gold, a non-interest-bearing asset, is priced primarily based on U.S. real Treasury yields: when real yields rise, the opportunity cost of holding gold increases and gold prices face downward pressure; when real yields fall, gold becomes more attractive, and capital inflows push prices higher. This shift in interest rate expectations directly triggered the corrective rebound in gold prices.

Separately, markets also noted news that the U.S. government plans to release up to 40 million barrels of crude oil from its strategic petroleum reserve to stabilize international oil prices. Previously, markets had worried that prolonged escalation of geopolitical conflicts in the Middle East would drive crude oil prices higher, and a rebound in energy inflation would force the Fed to maintain high interest rates or even raise rates further. Following the pullback in oil prices, market concerns over energy-driven inflation have eased somewhat, further reducing pressure on precious metals. Still, geopolitical risk remains an uncertain factor hanging over markets; renewed conflict escalation would rapidly reignite inflation expectations.

II. Full Review of International and Domestic Gold Market Performance

COMEX December front-month gold futures closed up $46.6, or 1.12%, on September 29, settling at $4,215 per ounce. The contract recovered part of the prior day’s losses and ended a multi-day downtrend. Before this rebound, gold prices underwent a deep correction, with spot gold briefly testing a seven-week low. The core driver of the pullback was rising hawkish Fed expectations, which pushed 30-year U.S. Treasury yields to multi-year highs and strengthened the U.S. dollar. A large number of speculative long positions triggered stop-loss orders, prompting a sharp sell-off in precious metals and a temporary spread of market panic.

With Williams’ dovish remarks and falling international oil prices, market sentiment improved and capital flowed back into gold assets. Global gold ETFs saw net inflows, while domestic gold-themed ETFs attracted more than 300 million yuan in a single day, pushing total product shares to a record high, which shows allocation-focused domestic capital is buying gold-linked assets on dips. From a trading perspective, however, this rally is a technical corrective rebound driven by shifts in interest rate expectations rather than a trend reversal. Heavy sell pressure remains from trapped long positions built up during the prior decline, and high volatility will persist in the short term.

Domestic precious metal markets moved in tandem with overseas markets. The main Shanghai gold futures contract swung sharply overnight, first falling then rebounding. Trading volume expanded markedly and open interest rose, reflecting a notable pickup in market activity. Domestic spot gold and retail gold prices at major jewelers climbed alongside international gold prices. It should be distinguished that futures prices reflect expectations, while retail gold prices at physical stores include processing fees and brand premiums, so their fluctuations do not fully align. At the physical consumption end, higher retail prices have somewhat dampened demand for gold jewelry, while purchases of investment bullion remain steady.

Silver rebounded alongside gold but exhibited far greater volatility. Silver carries both precious metal safe-haven attributes and industrial metal exposure; industrial demand prospects create additional price noise, the gold-silver ratio has widened in stages, and silver trading carries higher difficulty than gold.

III. In-depth Views from Global Institutions

1. Domestic Futures Research Institutions

Gold remains in a wide-range consolidation pattern in the short run, and price direction is fully dependent on sustained readings of U.S. inflation and employment data. If subsequent releases of the PCE price index and non-farm payrolls consistently beat market forecasts, Fed rate hike expectations will heat up again, U.S. real Treasury yields will climb, and gold will likely face renewed downward pressure. Conversely, cooling labor markets and sustained declines in core inflation will further reduce rate hike expectations, opening room for a larger gold rally.

Institutions specifically point out that the impact of geopolitical conflicts on gold has undergone a logical shift. The traditional notion that “gold is bought in turbulent times” has limitations in the current environment: if conflicts push crude oil prices higher and fuel energy inflation, this will instead force the Fed to maintain tightening policies and weigh on gold. Safe-haven buying will only dominate price action when geopolitical crises escalate into global financial liquidity panics that trigger fire sales across risk assets. The Middle East conflict remains in a stalemate at present and has not evolved into a systemic financial crisis, so safe-haven demand has temporarily taken a back seat, with interest rate expectations as the primary market driver. From a short-term trading perspective, chasing rallies is not advisable, as pullback risks remain at elevated rebound levels.

2. Overseas Public Funds and the World Gold Council

Gold prices will continue to be buffeted by repeated shifts in Fed policy expectations in the near term, amplifying volatility, but the core long-term supportive fundamentals for gold remain intact. The World Gold Council tracks central bank gold purchases worldwide. Surveys show nearly 90% of central banks expect to continue increasing gold holdings over the next year, and almost half plan to raise gold’s share within foreign exchange reserves. Many central banks choose to buy gold on dips during price corrections to diversify reserve holdings and reduce exposure to U.S. dollar assets, hedging against U.S. Treasury credit risks. China’s central bank has raised gold reserves for multiple consecutive months, while Poland, Uzbekistan and other countries maintain regular gold purchases. Sustained official buying has built a solid floor for gold prices.

Institutions believe short-term price corrections are cyclical fluctuations within the interest rate cycle. Gold retains prominent medium and long-term allocation value, but it works best as a portfolio diversification tool rather than a short-term speculative instrument. Investors are advised to wait until the Fed’s rate hike cycle confirms its peak and markets begin pricing in rate cuts before increasing position sizes.

3. Top Wall Street Investment Banks (Goldman Sachs, JPMorgan, etc.)

Investment banks have lowered their near-term gold price forecasts because the Fed retains the option to raise rates within 2026, and the high-rate environment will continue to cap gold upside. Their medium-to-long-term outlook remains bullish. Goldman Sachs projects that backed by persistent central bank gold purchases, gold could climb to $4,900 per ounce by the end of 2026. JPMorgan holds a more optimistic view, arguing that if U.S. debt issues and fiscal deficit risks continue to surface, gold may challenge levels above $5,000 in the longer run. At the same time, banks warn of risks. Gold had accumulated substantial gains previously, and speculative positioning in futures markets is highly volatile. Even with a long-term bullish thesis, heavy buying at current levels carries high risk. Back-and-forth shifts in interest rate expectations will trigger frequent sharp swings, raising the difficulty of short-term trading significantly.

IV. Key Events and Data to Monitor Going Forward

1. U.S. Core PCE Price Index (Fed’s preferred inflation gauge) PCE is the primary metric the Fed uses to set monetary policy, scheduled for upcoming release. Markets expect August core PCE to rise 3.3% year-on-year, still well above the 2% target. A higher-than-expected reading will revive hawkish expectations and pressure gold; a lower-than-expected print will further cool rate hike expectations and benefit gold.
2. U.S. September Non-Farm Payrolls Report (released October 2) Labor market strength directly reflects U.S. economic resilience. A large upside surprise in new jobs signals economic overheating and gives the Fed grounds for additional hikes. A marked weakening in employment indicates tightening policy is starting to cool the economy and eases rate hike fears. Non-farm payrolls often trigger large volatility in gold, U.S. Treasuries and the U.S. dollar.
3. Ongoing public remarks by Fed officials Ahead of the October FOMC meeting, multiple voting members will deliver speeches. Markets will continuously parse policy signals from these remarks, and every hawkish or dovish statement may disturb interest rate expectations.
4. Middle East geopolitical developments and international crude oil prices The evolution of regional conflicts and movements in WTI and Brent crude oil indirectly shape U.S. inflation expectations, acting as an indirect driver of gold prices.
5. U.S. Treasury issuance and fiscal deficit updates Persistent high levels of U.S. government debt weigh on U.S. dollar credit over the long run, forming a long-term bullish factor for gold, though its near-term impact on market prices is limited.

V. Summary of Market Logic

Short-term view: Speeches by Fed officials, U.S. inflation and employment data dominate market rate hike expectations. U.S. real Treasury yields and the U.S. Dollar Index dictate gold price swings. The market is trapped in a wide consolidation range. The current rebound is corrective, its sustainability remains untested, upside resistance is evident, and repeated price moves are highly likely.

Medium-to-long-term view: Sustained central bank gold purchases, reserve diversification across nations, U.S. sovereign debt and fiscal pressures jointly form a long-term support floor for gold prices. A new trending bull market for gold will only emerge once the Fed’s rate hike cycle ends completely and markets begin pricing in a rate-cut inflection point. Until then, gold will likely maintain a broad uptrend framework punctuated by multiple deep corrections.