Unfazed by Decline Expectations! Spot Gold Withstands Hawkish Storm as a Key Turning Point Approaches?

Today is Sunday (September 20), and markets are closed. As of Friday (September 18), spot gold closed near $4,377.52, up 0.84%. The opening price was $4,340.30/ounce, the highest touched $4,399.49/ounce, and the lowest dropped to $4,334.37/ounce. Spot gold surged past $4,392.65/ounce (≈937 yuan/gram), jumping 1.19% in a single day! Easing Fed rate hike expectations, the People's Bank of China’s 22 straight months of aggressive gold purchases (up 20.22 tons in August), and an oil tanker attack in the Strait of Hormuz created a triple storm that ignited a global rush for safe havens! Chow Tai Fook, Chow Sang Sang, and Lao Feng Xiang all saw pure gold prices break through 1,315 yuan/gram, hitting a year-to-date high!

[News Express]

With rate hikes implemented, hawkish remarks from the Fed chair, and the U.S. 10-year Treasury yield climbing above 5%—this standard set of bearish factors initially pushed gold prices below $4,250, but they quickly rebounded, ending Friday near the weekly high of $4,400, thus snapping a three-week decline. Long-term yields also began pulling back from their highs. The market’s message is clear: there is selling pressure, but the buying power is even stronger.

Oil prices fell for the third consecutive trading day, with Brent retreating to around $104 and WTI back at the $100 mark. This dragged down inflation expectations, giving long-term rates some breathing room. The marginal cost of holding non-yielding assets is dropping, presenting a classic tailwind for gold. While “pullback” does not mean “turnaround,” once momentum begins to waver, resistance weakens layer by layer.

Previously, gold prices survived on loose policy expectations, but now they are supported by slower, steadier, and more persistent forces: global central banks continue diversifying reserves and reducing U.S. debt holdings; global gold ETF holdings have rebounded close to 3,000 tons, with renewed investment demand; India’s digital gold purchases surged 110% year-on-year in August, and physical investment demand remains steady. These funds are not sensitive to short-term rates, do not chase highs, but absorb each pullback—building a solid base.

The overall U.S. deficit remains above 6% of GDP, with annual interest payments alone exceeding $1 trillion. The longer rates stay high, the harder it becomes to manage this deficit. The traditional view that “higher interest rates are always bearish for gold” is becoming less accurate, as high rates themselves are worsening debt sustainability anxieties—which gold directly hedges. Goldman Sachs maintains a $5,400 target by end-2027, UBS sees a gradual rise to $5,400 by September 2027, and SocGen projects $5,000 to $5,250—institutional differences are over magnitude, not direction.

Can oil prices continue to fall: determines the slope of inflation expectations and real interest rates;

Can the 10-year U.S. Treasury yield return meaningfully below 5% and stay there: determines whether the pressure is easing or ending;

Will Fed officials’ statements soften: determines the likelihood of further rate hikes in October and December;

Suez Canal traffic and Middle East tensions: influence whether safe-haven holdings should be increased;

ETF fund flows and central bank gold buying pace: decide if the base level can be reinforced further.

[Latest Spot Gold Technical Analysis]

Technically, a reversal from the 50-day moving average confirms a mid-term bullish trend and aligns with the pattern of higher lows since mid-July. As long as gold prices can hold above $4,405, the upside is truly open, with the next targets at $4,466 to $4,500. If the $4,331 pivot is lost, a retest of $4,281 and $4,235 is likely.

The rhythm is more important than the levels: the refusal to collapse amid hawkish Fed projections and a high rate environment shows the driving logic has already shifted.