Gold Traders Weigh China’s Buying Spree Against Soaring September Rate-Hike Bets
Published on 07/13/2026 at 11:22 | Redaktion boerse-global.de
Gold is caught in an unusually stark tug-of-war. On one side, central banks led by China are stockpiling bullion at a record pace. On the other, a sudden spike in oil prices has sent rate-hike expectations surging, crushing any safe-haven bid the metal would normally enjoy during a geopolitical crisis.
Spot gold slipped about 1.2% in early trading on Monday, briefly piercing the $4,100 level to touch $4,070 an ounce. That followed a Friday close of $4,127.60. The decline comes despite a weekend escalation in the Middle East, where the US and Iran exchanged rocket fire near the Strait of Hormuz. Oil jumped 4–5% on the news. Normally such tensions drive investors into gold, but rising energy costs are now fueling a different fear: that the Federal Reserve will keep rates higher for longer — or even hike again.
That shift is visible in the CME FedWatch Tool, which puts the probability of a rate increase in September at roughly 72%, up from 63% the prior week. Gold pays no interest, and the combination of rising real yields and a firmer dollar is eroding its appeal. The market will get further clues this week from Fed Chair Kevin Warsh’s semiannual testimony to Congress, starting Tuesday, and from the June CPI and PPI readings. Stronger-than-expected inflation data would likely pile additional pressure on the yellow metal.
Should investors sell immediately? Or is it worth buying Gold?
Yet on the demand side, the narrative could hardly be more different. The People’s Bank of China added roughly 480,000 fine ounces in June — its 20th consecutive month of purchases and its largest monthly addition since October 2023. Poland remains the world’s most active buyer by tonnage in 2025, followed by Uzbekistan and Kazakhstan. A World Gold Council survey of 74 central banks found that 45% plan to increase their gold holdings over the next 12 months, the highest reading since the survey began in 2018, and only one central bank intends to reduce its reserves. Policymakers cite geopolitical uncertainty, diversification needs, and a gradual move away from the dollar—three-quarters of respondents expect the greenback’s share of global reserves to decline.
Given this institutional buying, the recent price weakness seems paradoxical. But the headwinds from monetary policy are proving dominant. Minutes from the Fed’s June meeting revealed growing inflation concerns, with some participants favoring a rate hike, even though the committee ultimately held steady. HSBC has cut its average gold forecast for 2026 to $4,560 an ounce from $4,864, blaming tight policy and a strong dollar.
Technically, the metal remains in a downtrend. It is now 5.45% below its 50-day moving average of $4,365.48 and 9.07% below its 200-day average. The relative strength index sits at 44, suggesting neutral-to-weak momentum without an oversold extreme. From the January 2026 record high of $5,626.80, gold has lost 26.64%. At the same time, the distance to the 52-week low of $3,901.30 set last October is only 5.80%, leaving limited downside cushion if rate fears intensify.
The standoff between structural central-bank accumulation and hawkish Fed expectations is likely to persist until fresh data — or a clear shift in Fed messaging — breaks the stalemate. For now, gold remains pinned near $4,100, with geopolitics providing a floor that inflation fears keep threatening to cave in.
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