Gold Expected to Remain Range-Bound Despite Rising Bets on Fed Pause in Rate Hikes

Spot gold is currently trading near $4,393.71, maintaining an overall range-bound pattern. After weaker U.S. inflation and employment data, market bets on a Federal Reserve pause in rate hikes have increased, easing pressure on the dollar and interest rates and providing support for gold prices, though gold has yet to achieve a clear directional breakout.

**Cooling Rate-Hike Expectations Provide Support**

Recent U.S. inflation and consumer data have weakened in combination. The July CPI rose only 0.1% month-over-month, with the year-over-year rate slowing to 3.4% from June's 3.5%, while core CPI fell to 2.5% year-over-year; July PPI was flat month-over-month, below market expectations. Market surveys show that bets on a September Fed rate hike are now significantly lower than previous levels, with the relevant probability around 30%, and mainstream views are gradually shifting from "continued hikes" to "a pause in hikes." Since gold generates no interest income, declining rate-hike expectations tend to suppress real rates and the dollar, thereby enhancing gold's relative appeal.

**Range-Bound Trading Remains the Dominant Theme**

Although the shift in policy expectations is favorable for gold prices, the market has already partially priced in a pause in hikes. Whether gold can subsequently break above previous highs still depends on whether new economic data can continue to validate this policy path. From a technical perspective, spot gold has reclaimed the 100-day moving average near $4,380 and remains above the mid-band of the 20-day Bollinger Bands, with a bullish trend structure, but it still faces resistance at the upper boundary of the box range, lacking short-term directional momentum.

**Positive Signals in Fund Flows**

Some gold ETFs have recently seen renewed buying, indicating that certain institutional investors are beginning to rebuild long positions amid price pullbacks. Global central bank demand for gold remains resilient, providing medium-term fundamental support for prices. However, a single month of weaker consumer data does not necessarily mean U.S. consumer demand is entering a sustained contraction phase; part of the decline is related to lower gasoline prices, weaker auto sales, and changes in promotional timing. The economy is closer to "growth slowing" than "consumer recession." Overall, gold prices are likely to continue trading within a range in the near term, awaiting new data for directional guidance.