Gold moved closer to $4,330 an ounce on Wednesday, pressured by a stronger US dollar and the growing expectation of further Federal Reserve interest rate hikes.
Fed policy and inflation outlook weigh on gold prices
Spot gold fell around 0.6% to approximately $4,334 in late Asian trading, extending a recent decline that erased most of last week’s gains following the Federal Reserve meeting. The Bloomberg Dollar Spot Index rose for a fourth straight session, making gold more expensive for buyers using other currencies.
Despite this pullback, gold’s fall has been limited compared to the broader headwinds from rising global interest rates. Persistent official-sector buying and continued strong Chinese imports have helped cushion the downside.
Boston Fed President Susan Collins gave her support to last week’s quarter-point rate hike, warning that the risk of inflation staying well above the central bank’s 2% target has increased. Richmond Fed President Thomas Barkin also highlighted that recent inflation shocks could persist, rather than quickly fade as supply conditions improve.
These comments have reinforced expectations that September’s move to a 3.75%–4% policy range may not be the last increase from the Fed this year.
Priyanka Sachdeva, an analyst at Phillip Nova, explained that gold remains caught between its appeal as a safe-haven asset and downward pressure from higher interest rates, leaving it especially sensitive to shifts in oil prices and bond yields.
Oil prices, however, have become less of a threat to gold’s outlook. West Texas Intermediate crude lost more than 10% since last Tuesday as US-Iran diplomatic talks progressed and Saudi Arabia worked to restore its East-West pipeline. Softer energy prices reduce the risk that fresh inflation shocks will prompt even tighter Fed policy.
China’s buying creates a floor for gold
Demand from China is increasingly providing a structural floor for gold prices. Chinese gold imports exceeded 1,000 tonnes through August, already surpassing total purchases seen in 2025.
Chinese investors are buying more bullion as a shield against geopolitical tensions and limited domestic investment options.
According to data, Chinese gold ETFs added approximately 44 tonnes through August, while the People’s Bank of China purchased another 20.2 tonnes, its largest increase since October 2023. Official gold buying in China has now continued for 22 consecutive months.
Lisa Liu of Gold Mountains Asset Management noted that China’s gold purchases are becoming a long-term strategy for wealth preservation, rather than just a reaction to short-term market events.
Globally, gold-backed exchange traded funds brought in $18 billion of new inflows in August, raising overall holdings to a record 4,189 tonnes, according to the World Gold Council.
Mini dictionary: World Gold Council, an industry organization that monitors trends and data in the global gold market.
Key technical levels and market outlook
Gold is now trading near the lower end of its recent range, with the first notable support seen around $4,300. If prices fall below this level, further declines could target $4,230 and then $4,160.
On the upside, gold would need to reclaim $4,380 before testing the major resistance zone at $4,400–$4,405. A decisive break above that region could signal renewed upward momentum towards $4,500.
| Level | Price ($/oz) |
|---|---|
| Immediate Support | 4,300 |
| Next Supports | 4,230 / 4,160 |
| Initial Resistance | 4,380 |
| Major Resistance Zone | 4,400 – 4,405 |
| Potential Upside Target | 4,500 |
