Gold markets faced a conflicting set of signals in mid-September 2026. On September 16, spot gold was testing nearby resistance near $4,340 after two difficult days, while new data from the World Gold Council confirmed that Chinese gold ETFs added 11 tonnes in August. That was the second consecutive monthly increase and brought total Chinese gold ETF holdings to 293 tonnes, the highest level since April and the third-highest reading on record.
The Kobeissi Letter reported the same figures and noted that Chinese gold ETF purchases have reached 45 tonnes so far in 2026. If the pace continues, this year could record the second-largest annual inflow into Chinese gold ETFs. The World Gold Council also said purchases continued during early September, but cautioned that the strength was concentrated in investment demand. Wholesale gold withdrawals fell in August and jewellery demand remained weak, meaning not every part of China’s gold market expanded. Lower Chinese government bond yields, weak domestic equities, and a recovery in local gold prices from the March-to-June decline all helped make gold ETFs more attractive. The People’s Bank of China’s reported reserve purchase in August was separate from these ETF flows. On the technical front, the September 16 bounce lifted spot gold to about $4,327; a break and hold above $4,340 could open $4,370, while failure could send gold back toward $4,316 and $4,290.
A day later, the Federal Reserve changed the macro backdrop. The central bank raised its benchmark interest rate by 0.25% on Wednesday, the first increase since 2023. The decision was unanimous and widely expected, but the Fed’s updated median projection for the policy rate at the end of 2026 rose to 4.1% from 3.8%. Fed Chair Kevin Warsh said too many categories of goods and services were still showing annualized price increases above 3% over both six-month and twelve-month periods. Markets interpreted the guidance as hawkish, signaling that more rate increases could be coming.
Spot gold initially slipped after the Fed decision but recovered during early Thursday trading, rising 1.2% to $4,314.57 an ounce. Gold futures fell 0.8% to $4,354.09 an ounce, while gold in New York was last seen down 0.5% at $4,365.50 a troy ounce. The rate increase pressures gold because the metal pays no interest, while higher bond yields and a stronger dollar make it less attractive. Treasury yields fell across the curve after the decision, but the dollar strengthened, keeping gold under pressure for much of the session.
Analysts at IG and MUFG highlighted the importance of U.S. rate expectations. Tony Sycamore of IG said expectations for another Fed hike later this year and an additional 50 basis points of increases in the first half of 2027 have added to headwinds for gold. He said gold needs to climb back above its 200-day moving average near $4,539 to show the pullback from the $4,697 high has ended; otherwise, prices could extend declines toward $4,200, with $4,000 as the next major support. MUFG analyst Soojin Kim said gold’s path is increasingly tied to the pace of U.S. interest rate increases, with inflation and elevated Treasury yields limiting upside even though geopolitical risks and safe-haven demand continue to provide some support.
