Gold slipped to $4,029 on Tuesday, down 1.17% on the day, as traders raised the odds of a Federal Reserve rate hike at this week's FOMC meeting. Central bank purchases running near five times their pre-2022 pace may be building a floor under the metal. JPMorgan and Goldman Sachs now sit $400 apart on where gold ends 2026.
Gold is trading at $4,029 this morning, down 1.17% on the day and 25.4% off its 6-month highs. Technicals flash Strong Sell across daily and weekly timeframes, yet structural demand from central banks may be building an unexpected floor.
The $4,000 line bends but holds
Gold briefly breached $4,000 on July 13 before clawing back. That intraday dip and swift recovery signals strong buy-the-dip interest, even as the overall trend deteriorates.
August futures opened at $4,083 per troy ounce on Tuesday, up just 0.1% from Monday's closing price, and gold has opened below $4,100 since July 14. Support sits at $4,003 on the daily chart and $3,968 on the weekly, with resistance at $4,104–$4,136. The weekly Stochastic at 18 and StochRSI at 5 are deep in oversold territory, historically a precursor to short-term bounces even within a downtrend.
Fed repricing pulls against central bank buying
Fed Governor Waller's hawkish remarks have moved markets. Traders now price a 43% probability of a rate hike at the July 28-29 FOMC meeting, a significant shift for a zero-yield asset. The CME Group's FedWatch tool puts the odds of a 25-basis-point increase at 35.8%, against 25.77% last week.
Against that, Goldman Sachs estimates central bank purchases at 81 tonnes in May alone, nearly 5x the pre-2022 average of 17 tonnes a month. The bank holds a $4,900 year-end 2026 target, betting that structural demand overwhelms Fed noise.
JPMorgan cuts its 2026 forecast to $4,400
JPMorgan lowered its 2026 gold forecast by 8% to $4,400, with a year-end target of $4,500, citing reduced ETF flows and measured central bank buying. That $400 gap between two top banks captures the genuine uncertainty in the market right now.
Geopolitics cuts both ways: inflation expectations lift gold, while a stronger dollar bid as a safe haven suppresses it. Trump's Gulf shipping blockade and a proposed 20% Hormuz transit fee have therefore produced indecision near $4,000 rather than a clean breakout either way. U.S. airstrikes against Iran are on hold again today as the two countries attempt to talk through a permanent peace agreement that would reopen the Strait of Hormuz.
Meanwhile China's imports are softening, down 5% month-on-month in June.
Sources: Investing.com, Yahoo Personal Finance
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