9.14 What truly drives short-term trends in gold and U.S. equities is not interest-rate hikes.

Don’t chase hot topics; don’t chase the market. Currently, the market-implied probability of a September rate hike—backed by real money—is 86%. Under former Fed Chair Yellen, it would likely already be at 100%. Given that markets have already priced in such a high likelihood, if the Fed announces no hike this week, the consequences would be unimaginable—long-dated Treasuries would plunge sharply, just as they did on July 29 when Powell abstained from voting for a hike and remarked that long-dated yields had already tightened financial conditions for him. Later, Bessent announced Treasury buybacks, temporarily stabilizing the situation—but yields have since surged again. If the Fed skips the hike this week—especially if Powell, who has vocally championed inflation fighting, fails to vote for a hike at this critical juncture—long-dated yields would spiral out of control, surging dramatically. Such an outcome would be unbearable for the U.S.—a genuine disaster. By comparison, a 25-basis-point hike is a relatively minor cost. As discussed in last week’s article, beyond the decision itself, what matters most is how Powell frames the broader anti-inflation path going forward. First, Powell’s style is deliberately vague: he prefers to ‘see how things unfold’ and has even stated that markets should lead the Fed, allowing the Fed to observe market choices. So I don’t expect him to lay out future steps clearly. Second, delivering one hike—especially if Powell personally votes for it ahead of Trump’s midterm election—already solidifies his image of institutional independence. He thus has little need to emphasize aggressive further hikes. Had he truly intended to signal such a stance, he would have done so upon taking office—establishing credibility early.

Gold has fallen this far—stop asking 'When is the bottom?'

These days, all eyes in the gold market are fixed on the Fed. The September FOMC meeting is imminent. And this time, market expectations are shifting rapidly. Just days ago, the debate centered on whether the Fed would hike at all; now, markets increasingly treat a hike as the baseline scenario. The latest market pricing shows a ~90% probability of a September rate hike. Goldman Sachs and JPMorgan have both revised their forecasts, now expecting a 25-basis-point hike this month. Unsurprisingly, gold is under pressure. Spot gold continued weakening today, briefly dipping near $4,318. But what’s truly worth discussing now isn’t whether the Fed will hike. Rather, it’s a question many retail investors still struggle to grasp: Why has gold already started falling—even before the news is official? The answer lies plainly in the price chart (candlestick pattern). Many gold traders’ biggest mistake is waiting for news. Nonfarm payrolls? Wait. CPI release? Wait. Fed speeches? Wait. FOMC meetings? Keep waiting. Then, only after the news breaks, decide whether to buy or sell. It sounds logical—but markets don’t operate that way. By the time everyone knows, the optimal trading opportunity has usually passed. This episode is the textbook example. After U.S. inflation data was released, rate-hike expectations surged—and gold began correcting immediately. Oil prices then rose amid geopolitical tensions, further stoking inflation fears and reinforcing market bets on Fed tightening—adding further downward pressure on gold. So if you’re now asking: ‘Is the Fed’s rate hike causing gold’s decline?’ Yes—it certainly is. But that’s merely an explanation. Traders focused on execution care more about one thing: Did price action already signal the answer? That’s the essence of technical analysis. The most useless way to interpret technical analysis is treating it like fortune-telling: ‘A golden cross appeared, so price must rise.’ ‘It’s oversold, so a rebound is due.’ ‘There’s indicator divergence, so the bottom is here.’ Real technical analysis isn’t that complicated. You only need to ask one question: Has the trend changed? In an uptrend, higher highs and higher lows form. In a downtrend, lower highs and lower lows form. That’s it. Too many people overcomplicate it—drawing dozens of lines, layering a dozen indicators—until they can’t even see the basic price structure. So right now, what matters most for gold isn’t who’s shouting ‘the bottom is in!’ Rather, it’s this: Has this leg down produced any genuine signs of stabilization?

Gold Slips as Oil Rally Fuels Rate Hike Bets Ahead of Fed Meeting

Sep 13, 2026

Oil prices surged over 2% due to Middle East supply disruptions, dragging gold lower as investors bet on Federal Reserve rate hikes amidst rising inflation.

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