Gold, Silver and Precious Metals Daily — 2026-09-05

Top developments

Gold Erases 2026 Gains on Fed Rate-Hike Fears

Spot gold prices fell sharply in early September, erasing almost all of their year-to-date gains as market expectations for a Federal Reserve rate hike in September surged to approximately 70%. This shift was driven by hawkish commentary from Fed Chair Kevin Warsh and resilient economic data, which pushed Treasury yields higher and strengthened the US dollar, making non-yielding assets like gold less attractive.

Central Banks Continue Aggressive Accumulation

Despite price volatility, central banks remain strong buyers of gold. The People's Bank of China (PBoC) reported a purchase of 640,000 ounces (approx. 20 tonnes) in July, its largest single-month increase since October 2023, bringing its total reserves to 76.08 million ounces. This marks the 21st consecutive month of accumulation by China, signaling continued diversification away from the US dollar.

Silver and Platinum Slide Amid Dollar Strength

Silver prices tumbled alongside gold as the US dollar index rose, with industrial demand concerns adding pressure to the white metal. Platinum also faced headwinds, though it had previously rallied on supply deficit concerns. The divergence between precious metals and equities highlighted the market's sensitivity to real yield movements during this period of monetary policy uncertainty.

1 sources

mining.com

mining.com

Local view

India: Bullion Market Sees Sharp Correction

Indian bullion markets reported significant declines in gold and silver prices over the past week, with gold falling by approximately ₹8,900 per 10 grams over five days due to global cues and local demand softening ahead of the festive season. Local jewelers noted that while physical demand remains robust long-term, short-term volatility has led to cautious buying. The import duty remains a key factor for domestic pricing, with the 15% duty plus 3% GST keeping local premiums high relative to international spot prices.

China: PBoC's Largest Purchase Signals Strategic Shift

Chinese financial media highlighted the PBoC's July gold purchase as a strategic move to bolster reserve security amid geopolitical tensions. Analysts note that the scale of the purchase (20 tonnes) is significantly larger than previous months, suggesting an accelerated pace of de-dollarization. Reports indicate that Shanghai gold premiums have remained relatively stable, reflecting balanced domestic demand against the backdrop of government encouragement for gold holdings among retail investors.

Context & numbers

• Fed Rate Odds: Market-implied probability of a September Fed rate hike reached ~70% earlier in the week before retreating following Governor Waller's comments.
• China Gold Reserves: Increased by 640,000 ounces in July 2026 to 76,080,000 ounces.
• ETF Flows: Global physically-backed gold ETFs saw outflows in June, with a decline of about 74 tonnes, indicating institutional caution despite central bank buying.
• India Import Costs: India's gold import duty stands at 15%, with an additional 3% GST applied to transactions, impacting local retail prices significantly compared to international benchmarks.

On the radar

• Upcoming CPI Data: Investors are closely watching the upcoming US Consumer Price Index (CPI) report, which will be critical in determining whether the Fed proceeds with a rate hike or pauses, directly impacting gold's direction.
• Jefferies Scenario Analysis: Jefferies released a report outlining three scenarios for gold prices, including a potential breakout above $5,000 if central bank buying accelerates further, or a correction if recession fears subside.