Gold Holds Firm as Brent Retreats Below $100, Despite Markets Pricing a September Fed Hike

• Spot gold rose 0.2% to $4,055.38 per ounce after falling more than 2% to $4,047.26 in the previous session. 
• Brent crude fell below $100 a barrel after rising more than 7%, its first move above that level since May. 
• CME FedWatch data price a 78% probability of a September Fed hike, although markets expect the Fed to hold rates next week. 
• Physically backed gold ETFs lost US$8.9 billion in June, reducing global holdings by 74 tonnes to 4,047 tonnes. 
• First-half inflows remained positive at US$8 billion as Asia recorded a record US$12 billion of purchases. Indian dealers offered discounts of up to $56 per ounce, a seven-week high, while Chinese bullion traded at a $3 to $6 per ounce premium.

Oil Retreat Eases Inflation Pressure, Supporting Gold's Rebound

Spot gold rose 0.2% to $4,055.38 per ounce, rebounding from the previous session's more than 2% drop to $4,047.26. US gold futures for August delivery rose 0.2% to $4,058.10 per ounce.

Brent crude surged more than 7% after the US president threatened retaliation against Iran and Houthi forces following a strike on two Saudi oil tankers in the Red Sea. Higher oil prices can reinforce inflation expectations, increasing the likelihood of higher interest rates and raising the opportunity cost of holding non-yielding gold.

Higher Real Yields Drive North American Gold ETF Outflows While Asia Sustains Global Demand

North American gold ETFs lost US$5.5 billion in June, extending first-half outflows to US$7.7 billion, the largest first-half withdrawals since 2013. Gold's June pullback, hawkish signals from Fed Chair Warsh, and inflation concerns linked to the US-Iran conflict pushed real yields and the US dollar higher. Higher real yields and a stronger US dollar increased the opportunity cost of holding gold, driving ETF redemptions. 

The European Central Bank raised interest rates by 25 basis points, its first increase since September 2023, as inflation concerns linked to the US-Iran conflict intensified. European gold ETFs recorded US$818 million of outflows during the month. CME FedWatch data price a 78% probability of a September Fed hike even as markets expect the Fed to hold rates next week, keeping higher interest rate expectations in place.

78% September Fed Hike Odds Keep Gold Focused on the Rate Outlook

Brent crude has fallen below $100 a barrel, but markets have not confirmed the Fed's policy path beyond next week's meeting. UBS analyst Giovanni Staunovo said the Fed is likely to hold rates next week, supporting gold prices in the coming months. CME FedWatch still prices a 78% probability of a September rate hike, indicating markets continue to expect tighter monetary policy.

• Base case: The Fed holds rates unchanged next week, matching consensus expectations, and gold holds above the $4,047.26 low set July 23, supported by oil's retreat below $100 a barrel, according to Reuters (July 24, 2026).
• Bear case: Brent crude re-breaches $100 a barrel on renewed Gulf disruption, and gold's rate-cut narrative reverses, pushing bullion back toward the $4,047.26 low, according to Reuters (July 24, 2026).

The CME FedWatch Tool, updated continuously ahead of next week's Fed meeting, is what will confirm which scenario is playing out.

India's Gold Discounts Widen as China's Premiums Signal Stronger Physical Demand

Physical gold demand is weakening in India but strengthening in China. Indian dealers offered discounts of up to $56 per ounce after domestic gold prices rose to 146,000 rupees per 10 grams, then eased to about 141,800 rupees, leaving inventories harder to clear. Chinese bullion traded at a $3 to $6 per ounce premium as buying demand remained firm. Peter Fung of Wing Fung Precious Metals said Chinese buyers view $4,000 per ounce as a support level, encouraging purchases on price dips. 

CME FedWatch probabilities can change with new economic data, making a single trade ahead of next week's Fed meeting highly dependent on incoming data. Tracking key market indicators is more reliable than focusing on the meeting date alone.

$100 Brent Tests Gold's Support at $4,055 as Rate Risks Build

Brent crude below $100 a barrel is supporting gold's rebound. Lower oil prices reduce inflation pressure, supporting gold if the Fed holds rates as expected. If Brent climbs back above $100 a barrel or the Fed unexpectedly raises rates next week, gold could retreat toward its $4,047.26 low as inflation concerns strengthen expectations for higher interest rates. 

A CME FedWatch probability above 78% would signal markets are increasing expectations for a September rate hike. Brent's daily close above or below $100 a barrel remains a key signal for gold.