Spot gold against the US dollar broke through the $4,400 per ounce mark once again on August 17, reaching $4,402.97 per ounce by 3:03 PM Beijing time.
According to Wind data, gold prices have been steadily conquering key resistance levels over the past week and a half. Since July 31, spot gold has accumulated a gain of over 9%.
On August 17, gold mining stocks also moved higher in tandem. In the Hong Kong market, by 3:20 PM, China Gold International was trading at HK$222.2, up over 3.541%; Lingbao Gold rose to HK$22.28, gaining over 4.015%; Zhaojin Mining hit HK$23.62, climbing over 4.145%; and Shandong Gold reached HK$22.32, advancing over 4.299%.
On the same day, domestic gold bar and jewelry prices in China also rose. By 10:30 AM on August 17, most bank and brand gold bar prices had increased, with Chow Sang Sang rising 9 yuan per gram compared with the previous day. In the jewelry sector, by 12:12 PM on August 17, prices for pure gold ornaments from several domestic brands remained firmly above 1,300 yuan per gram, up about 20 yuan per gram from last week.
Gu Fengda, chief analyst at Guoxin Futures, noted that in the short term, the core driver of this gold rebound is valuation repair stemming from the marginal cooling of the US economy. As a zero-yield asset, gold's key pricing anchor is the real interest rate. Recently, US employment and consumption data have weakened in tandem, consumer confidence has fallen, and signals of a slowing US economy have continued to materialize. The market has been actively correcting its previously overly hawkish rate hike expectations, easing upward pressure on real interest rates and pushing gold's price center higher.
Data from the US Bureau of Labor Statistics shows that in July 2026, non-farm payrolls stood at approximately 159 million, down 23,000 month over month—the first sequential decline since February 2026. During the same period, seasonally adjusted US retail trade and food services sales exceeded $763.6 billion, down $4.47 billion month over month, marking the first sequential decrease since January 2026.
As of the early morning of August 17 Beijing time, the probability of the Fed raising interest rates by 25 basis points in September had fallen to 30.1%, a sharp drop from 52.2% a week earlier. Meanwhile, the probability of holding rates steady rose to 69.9%, up significantly from 47.8% the previous week.
Notably, Wind data reveals that US medium- and long-term treasury yields have been on a volatile upward trajectory since 2020. From August 4, 2020, to August 14, 2026, the 10-year US Treasury yield rose by more than 4 percentage points; from March 9, 2020, to August 14, 2026, the 30-year yield also increased by over 4 percentage points.
"The persistent supply pressure of US long-term bonds keeps term premiums elevated. Even though short-end rate hike expectations have cooled, long-end nominal rates remain stubbornly strong, continuously capping gold's valuation ceiling," Gu explained. He added that Japan's high inflation and continued yen depreciation have led the market to significantly price in a September rate hike. Yen carry trade unwinding poses a phase-specific disruption risk, and combined with modest profit-taking reductions in short-term gold ETFs, these multiple factors are causing volatile market swings and difficulty in breaking through previous highs.
Despite short-term pressure on gold prices, Gu believes the medium-to-long-term bullish case for gold is clear and highly certain. "The global central bank gold purchasing trend has entered a structural upgrade phase, providing an extremely solid bottom support," he said. Gu pointed to the recent actions of the Bank of Korea as a particularly significant signal. In early August, the Bank of Korea announced it would establish a new domestic gold purchase channel alongside its existing methods, diversifying its gold acquisition pathways and laying the groundwork for expanding its medium-to-long-term gold holdings.
Furthermore, Gu believes the Fed's ultimate policy shift toward a rate-cutting cycle is clear, though the timing and pace remain subject to negotiation. The current high-rate environment is only temporary. UBS Wealth Management's Chief Investment Office also projected on August 13 that, as inflation gradually declines, the Fed will keep rates unchanged in 2026 and may resume an easing cycle in 2027. Lower policy rate expectations typically drag down real yields and weaken the US dollar, thereby supporting investment demand for gold.
UBS also stated on August 13 that although short-term market conditions may remain volatile, the medium-to-long-term drivers supporting gold remain unchanged. The bank projects gold prices could rise to $5,000 per ounce by the first half of 2027, with a target of $5,200 per ounce by end of June.
"If gold prices fall back below $4,000 per ounce in the short term, investors may view this as a potential window for strategic gold allocation," UBS added.
Earlier, some institutions had revised down their gold price forecasts. Standard Chartered Wealth Solutions' Global Chief Investment Office, in its global market outlook released on July 31, lowered its 3-month and 12-month gold price targets to $4,300 and $4,600 per ounce, respectively. Deutsche Bank also cut its Q4 2026 gold price forecast from $4,800 per ounce (predicted on June 22) to $4,600 per ounce on July 31.
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