$4,400 Back in Sight as Gold Bulls Regain Control Ahead of FOMC Minutes

Gold prices rebounded on Wednesday, regaining control and heading back towards $4,400 as bulls continue to cheer fading hopes of a September Fed rate hike. The recent weak US labor market data and mild inflation readings led markets to scale back their bets on a September rate hike from roughly 50% to 35%, according to the CME Group's FedWatch Tool.

The upcoming Federal Open Market Committee (FOMC) Minutes will be closely scrutinized to gauge the thinking among the board members under new leadership, which could offer fresh insights on the central bank's path forward on interest rates. If markets perceive the FOMC's internal debate as less hawkish, it could trigger a sell-off in the US Dollar alongside US Treasury bond yields, boosting non-yielding assets such as Gold.

However, Commerzbank analysts highlight that the gold price is holding firm despite rising US yields, suggesting other causes for the recent move higher. They argue that the market doubts the Fed's ability to combat inflation effectively or is reacting to concerns not directly tied to tighter policy, both of which would be positive for Gold.