Gold Prices Rebound Amid Hawkish Fed Bets and Strong US Data

Gold prices have rebounded from their recent decline, defying expectations of a hawkish Federal Reserve stance and stronger US employment data. Despite this, the metal's bullish structure remains intact, supported by persistent Chinese demand, geopolitical uncertainty, and concerns surrounding monetary policy. The next major test for gold will come from upcoming US inflation data, which could either strengthen the dollar and tighten Fed policy or weaken it and revive expectations of lower rates.

The August rally in gold has remained intact despite a sharp correction that saw prices fall toward $4,450. This rebound suggests that buyers remain active and willing to defend lower levels. The ability to recover from this drop is particularly important, as it indicates that the recent reversal has not triggered a broader trend breakdown.

China's continued strategic interest in bullion is another key factor supporting gold prices. The country has maintained a gold-buying streak for approximately 20 months, with physical demand from China providing an important source of support. This buying activity has exceeded official disclosures by the People's Bank of China, potentially indicating that China's overall accumulation is larger than public reserve data suggests.