Gold Tug-of-War Continues as China Tightens Screws and Fed Decision Looms

Gold prices hovered around $4,080 per troy ounce on Wednesday, representing a 1.28% gain from the previous session.

This comes as China tightens its grip on speculative trading, halting paper gold trades for retail clients at two major lenders: the Industrial and Commercial Bank of China and the Postal Savings Bank of China.

The move is seen as an effort to curb volatility and anchor price discovery more closely to physical bullion holdings. This shift in China's strategy has been unfolding since late July, when the People's Bank of China added to its reserves for the 20th consecutive month.