Last Friday, gold prices rebounded nearly 1% to close at $4,348, despite the CPI data strengthening expectations for a Fed rate hike next week. The current logic suggests that if Middle East tensions escalate, pushing oil prices higher, it would exacerbate inflation and increase the probability of a rate hike, which would weigh on gold prices. Conversely, a de-escalation in tensions would be favorable for gold's upside. This week's focus is on the Federal Reserve meeting and the Fed Chair's speech, with the hawkish or dovish stance requiring close attention.
On Monday, the CPI data reduced the probability of a September rate hike from around 60% to 55%, but it remains above the "50% threshold." The market still believes that "the possibility of a hike is greater than a pause." The real "showdown" is the Fed's September rate decision, scheduled for 2:00 AM this Thursday. The CPI is just the "appetizer," while the FOMC meeting is the "main course." At this point, the direction is not yet set, and gold is likely to remain range-bound between $4,280 and $4,450 before the meeting, awaiting the final answer from the rate decision.
However, the U.S. government's debt level has surpassed $40 trillion, and the Treasury Department announced last week that it would buy back over $5 billion in long-term bonds, yet long-end yields remain at elevated levels. With such a massive debt burden, the Fed's room for aggressive rate hikes is naturally constrained. The aggressive view calling for "three cumulative rate hikes by mid-next year" will be difficult to implement.
From a technical perspective, the area around $4,360-4,355 serves as near-term resistance, acting as the middle band of the hourly range. A move above this level could lead to a test of the upper boundary near $4,380-4,385. On the downside, support is seen at the lower band of $4,330-4,320 and $4,310-4,300. Early in the week, range-bound trading is expected, with a technical bias leaning toward downside. However, ahead of major fundamental events, market sentiment could trigger unexpected volatility.
Therefore, for gold trading at the start of the week, conservative traders may choose to stay on the sidelines, while aggressive traders can trade the range with short-term long and short positions, though leaning toward selling on rallies is advisable. In summary, the real answer comes early Thursday morning. The first half of this week is likely to be a choppy and exhausting market. It is suggested that traders operate within the range mentioned above—$4,280-4,450, or a tighter range of $4,300-4,400—with quick entries and exits, lighter positions, and patience until the rate decision.
For today's trading strategy: Gold: Sell at $4,350-4,355, with a stop loss at $4,360, targeting $4,300-4,280.
Key economic data and events to watch today: Monday, September 14, 2026, at 23:30 PM: U.S. 3-Month Bill Auction - High Rate at 3.80%, and U.S. 3-Month Bill Auction - Bid-to-Cover Ratio.