Spot gold has pulled back sharply after rising nearly 10% in August, cooling expectations for another rapid leg higher. According to Polymarket, the probability of gold reaching $5,000 per ounce before the end of the year is now only slightly above 50%, while the odds of hitting $4,500 are close to certain. The market assigns about a 13% chance to gold reaching $6,000, and the probability of a near-term rebound to $4,700 is below one-third.
The latest pullback came as hawkish signals from the Federal Reserve, rising U.S. Treasury yields and stronger oil prices weighed on sentiment. Spot gold fell more than 2% on Tuesday to around $4,350 per ounce, down from a prior high near $4,697. After Federal Reserve Chair Warsh delivered a hawkish message at Jackson Hole, bets on a September rate hike climbed to about 66%, while the U.S. 10-year Treasury yield rose to roughly 4.78%. Brent crude also moved above $91 a barrel, adding to inflation pressure.
Even so, the report said the longer-term case for gold has not disappeared. Concerns over fiscal deficits, expanding government debt and the dollar’s purchasing power are still seen as supportive, while Citigroup expects gold to reach $5,000 over the next 6 to 12 months and lifted its short-term target to $4,800.
Spot gold has retreated quickly after gaining nearly 10% in August, cooling expectations for a continued surge.
Polymarket data shows the probability of gold reaching $5,000 per ounce by year-end is now only slightly above 50%. The odds of hitting $4,500 are close to certain, while the probability of reaching $6,000 has fallen to about 13%. The chance of gold returning to $4,700 in the near term is below one-third.
Gold pulls back from recent high
Hawkish Federal Reserve signals, higher U.S. Treasury yields and rising oil prices all weighed on the market. Spot gold fell more than 2% on Tuesday to around $4,350 per ounce, marking a clear retreat from its earlier high of about $4,697.
After Federal Reserve Chair Warsh delivered a hawkish message at the Jackson Hole symposium, market pricing for a September rate hike climbed to about 66%. At the same time, the yield on the 10-year U.S. Treasury rose to roughly 4.78%, while Brent crude moved above $91 per barrel, adding to inflation pressure.
Long-term support remains in focus
Still, the longer-term bullish case for gold has not disappeared. The report said fiscal deficits, expanding government debt and concerns over the dollar’s purchasing power continue to offer support for prices.
Citigroup expects gold to rise to $5,000 over the next 6 to 12 months and has raised its short-term target to $4,800. Market attention is now turning to upcoming U.S. employment and inflation data to gauge whether gold bulls can regain momentum.
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