Either Gold or the Market 'Wrong' About Fed Rate Forecasts

AI desk brief

Gold rallied sharply, reversing most of this week’s prior $100 drop as crude oil eased and government bond yields backed off record highs ahead of the Fed’s September decision. Spot gold hit $4,360/oz after touching 5-week lows near $4,254 on Monday; silver briefly reached $64.93/oz, more than 4.1% above Monday’s low.

The piece frames the market as torn between a hawkish rate path and supportive structural demand. MKS Pamp’s Nicky Shiels says gold is effectively calling for fewer hikes than the rates market expects, while Metals Focus says healthy central-bank buying in July-August has helped offset the drag from higher rate expectations. The 10-year Treasury yield closing at 5.00% and firm US data keep pressure on non-yielding metals, but easing yields and geopolitical support remain offsetting positives.