The Fed Rate Decision Remains Uncertain, Gold Prices Fluctuate Widely and Fall Below $4,400 Again During the Session

　　

　　 The Federal Reserve's interest rate policy for September remains undecided, and gold prices have been “jumping up and down” in a highly volatile manner.

　　 According to data from Tonghuashun, since the beginning of August, the international gold price (using the London spot gold price as a reference) first experienced a rapid increase. From August 3 to August 25, international gold prices rose by 15.24%, climbing from $4,000/oz to nearly $4,700/oz.

　　 However, in the five trading days following the surge, international gold prices fell for five consecutive sessions. From August 26 to September 1, total decline reached 7.08%. On August 28 and September 1, the daily drop was close to 3%, and the gold price fell below the $4,400/oz level, closing at $4,327.28/oz on September 1.

　　 Between September 2 and September 4, international gold prices rebounded, again reaching above $4,400/oz, and closed at $4,430.52/oz on September 4.

　　 On September 7, intraday international gold prices once again broke through the $4,400/oz threshold, with a low of $4,384.5/oz (as of 16:15 GMT+8). Compared to the August high, the price per ounce fell by about $300.

　　

　　 Regarding the recent wide fluctuations in international gold prices, most market analysts believe the main reason is expectations about whether the Fed will raise rates in September.

　　 According to CCTV Finance, on the evening of August 28 (GMT+8), Federal Reserve Chairman Kevin Walsh made a keynote speech at the Jackson Hole Global Central Bank Annual Meeting, reiterating the Fed’s “firm and fixed” 2% inflation target, and stated that if underlying inflation does not fall clearly and quickly enough, the Fed “still has work to do.”

　　 This was interpreted by the industry as Walsh's closest statement yet to acknowledging a rate hike may be necessary. Influenced by rising rate hike expectations, international gold prices experienced the largest single-day decline in the recent period.

　　 But on September 3, Federal Reserve Governor Christopher Waller sent out a “dovish” signal, cooling expectations of a Fed rate hike. The U.S. Dollar Index fell 0.56% on the day, boosting international gold prices by 2.09%.

　　 On September 4, the U.S. August nonfarm payrolls report was released, showing the U.S. job market outperforming expectations and pushing up rate hike expectations again. On that day, international gold prices dropped 1.08%.

　　 Dramatically, however, international gold prices quickly found support near $4,365/oz and then rebounded in a V-shaped recovery, recovering most of the losses.

　　 The “diminished effect” of the nonfarm payrolls data is mainly because the market believes that the most decisive data for a rate hike is the inflation data to be released this coming weekend. On Thursday (September 10, local time), the U.S. Bureau of Labor Statistics will release the August Producer Price Index (PPI), and on Friday (September 11) will release the August Consumer Price Index (CPI).

　　 Currently, major Wall Street institutions are still divided on whether rates will rise in September: BofA Securities believes the data will be strong enough to support a rate hike, while Citi expects core inflation to cool further, making it more likely the Fed holds steady.

　　 The August CPI reading will be the “key battle” for the September rate decision. BofA Securities points out that even if the composition of August inflation data is not alarming, it is unlikely to provide sufficient reason for the Federal Open Market Committee to postpone a rate hike. The September 11 data release will be the most critical test for Fed policy direction in the near term.

　　 However, Citi forecasts that U.S. August core CPI will rise just 0.184% month-on-month, with the annual rate falling to 2.3%—if true, it would be the lowest annual reading since April 2021, when core CPI first exceeded 2%, enough to prompt most officials to keep rates unchanged.

　　 According to the latest CME “FedWatch” data, there is a 42% probability that the Fed will keep rates unchanged in September and a 58% chance for a 25-basis-point hike.

　　 The ever-changing data has made investors increasingly cautious. The world’s largest gold ETF, SPDR, currently holds 1,052.06 tons, marking two consecutive days of reductions, though on September 1 and 2, holdings increased by more than 14 tons in total.

　　

　　 Meanwhile, there is another unusual phenomenon in this year's gold market. Central bank gold reserves are all “on the move” globally.

　　 The Dutch Central Bank announced on the 2nd that from March to August this year, it transferred about 86 tons of gold reserves from New York, USA and Ottawa, Canada to London, UK, to diversify risk and prepare for crisis response.

　　 According to the Dutch central bank, about 59 tons of gold were transferred by selling on the New York market and then purchasing from the London market, over 27 tons were physically shipped from the U.S. and Canada to Zeist, Netherlands, and an equivalent, internationally standard quantity was moved from Zeist to London.

　　 Dutch Central Bank data show that by the end of 2025, the Netherlands will hold 612.4 tons of gold reserves, mainly stored in Zeist, London, New York, and Ottawa.

　　 After this adjustment, the proportion of Dutch gold reserves stored in Zeist remains unchanged at 30.8%, the share in New York fell sharply from 31.3% to 18.5%, Ottawa’s proportion decreased from 19.7% to 18.5%, and London’s share rose from 18.1% to 32.1%.

　　 France has gone even further. From July 2025 to January 2026, the Banque de France will make 26 transfers to move 129 tons of gold—about 5% of its gold bar reserves—previously stored at the New York Fed since the late 1920s. The strategy is also “sell in New York, buy in Europe,” and all the new bars remain in Paris. Thanks to gold’s price rally during these transactions, this move will yield €12.8 billion in capital gains, of which €11 billion will be recognized for the 2025 fiscal year.

　　 With this move, France’s 2,437 tons of gold reserves have all returned home, with its New York-held balance reduced to zero. According to the head of the French central bank, Galhau, the old bars mostly failed to meet standard specifications and the 99.99% purity required by the London Bullion Market Association, making it more cost-effective to remelt or buy new bars rather than transport them back, and there was no political motive.

　　 Germany acted earliest. Announced in 2013 with completion by 2020, the plan was finished ahead of schedule in August 2017, with 674 tons (53,780 bars) transported back from New York and Paris, and each bar inspected in Frankfurt for authenticity, purity, and weight. Nevertheless, about 1,236 tons, or around 37% of Germany's reserve, remains at the New York Fed.

　　 In July 2025, Serbia announced it had returned all of its gold reserves—about 50.5 tons—home.

　　 India has also been repatriating its gold reserves in recent years, reducing its share stored overseas from 55% to 22%.

　　 According to the World Gold Council’s 2026 central bank gold reserve survey, over the past 12 months, 19% of central banks have increased the share of gold held domestically or diversified storage locations, up from only 7% a year ago, with the number of central banks keeping reserves in New York and London vaults continuing to drop.

　　 Qu Rui, senior deputy director of the Research and Development Department at Dongfang Jincheng, told the reporter that in the short-term, gold prices will likely fluctuate widely in the $4,300–4,600/oz range, with direction dependent on U.S. inflation data for August and the FOMC meeting in September. In the medium term, the expectation is for the “center line to rise slowly, with overall wide fluctuations” and a core range of $4,200–4,700/oz. The trend of more central banks diversifying their overseas gold reserves—especially those stored in the U.S.—is likely to continue.

Editor: Zhu Henan