Gold Prices Range-Bound as Central Banks and Fed Clash

The gold market is experiencing a tug-of-war between central banks' structural buying and the Federal Reserve's tightening monetary policy, leaving prices range-bound near $4,080 an ounce.

Bullion has rebounded roughly $105 from its nine-month low of $3,975 hit in mid-July but remains capped by the Fed's hawkish undertone. Markets now price in a 78% probability of a rate increase at the September 15-16 meeting.

Central banks purchased 289 tonnes of gold in Q2 2026, with Poland leading the charge and adding 51 tonnes to its reserves. Russia was the notable seller, offloading 22 tonnes from its stockpile.

The rally from July's lows also reflects escalating turmoil in the Middle East, providing a safe-haven bid for gold despite the Fed's stance. Commerzbank has cut its year-end gold price forecast to $4,500 per ounce and sees room for a recovery from current lows.