Gold Rangebound Around $4,400 Amid Rising Rate-Hike Expectations
Gold prices remain rangebound around USD 4,400 as gold traders and algorithmic programmes struggle to determine which theme will set the tone. Rising rate-hike expectations and higher bond yields have increased the opportunity cost of holding non-yielding assets like gold.
A softer dollar has provided support for gold, while underlying investment demand through ETFs and futures remains relatively resilient. Geopolitical uncertainty also continues to elevate gold's appeal as a portfolio diversifier.
The Bloomberg Dollar Index has fallen 1.25% over the past month, led by strength in Asian currencies such as the KRW, JPY, and AUD. The upcoming FOMC decision is seen as a coin toss between unchanged rates and a hike, while the August CPI and PPI releases later this week could provide a decisive catalyst.
From a technical perspective, gold has settled into a roughly USD 200-wide range around USD 4,400 following its August rebound. Bears may focus on an emerging head-and-shoulders formation, with a break below USD 4,300 potentially signalling a deeper correction towards the established support area around USD 4,000.