Gold market September 2026: hawkish Fed curbs gold rally, platinum supply squeeze looms

1. Gold's strong rally is challenged by the Federal Reserve's hawkish stance and rising US interest rates.
2. Platinum faces a significant structural supply deficit, signaling potential price and lease rate increases.
3. The US dollar's long-term weakness could provide crucial support for gold prices despite rate hikes.

Gold's rally faces hawkish headwinds

Gold surged to USD 4,431/oz as of September 3, marking a robust 9.3% month-over-month increase and an impressive 24.5% year-over-year gain. This strong performance was underpinned by significant investor interest, with ETF holdings increasing by 92.9 tonnes in the first three weeks of August, reaching a total of 4,160.9 tonnes. Options sentiment also remained bullish, indicated by a one-month 25-delta risk reversal skewed in favour of calls. However, this momentum is now contending with a more aggressive US monetary policy. Following Federal Reserve Chairman Warsh's Jackson Hole speech, US futures fully price two 25 basis point increases in the Federal funds rate by early 2027. Gold's high correlation to US real long-term bond yields and the US dollar index (-0.79 YTD) means rising rates and a potentially stronger dollar present significant headwinds, despite the dollar's recent dip of 0.9% MoM.

Platinum's supply squeeze and broader commodity strength

Platinum, a key focus, also saw substantial gains, reaching USD 1,772/oz (+8.9% MoM, +24.7% YoY). Despite this, it failed to breach its 200-day moving average of USD 1,940/oz, finding support around USD 1,700/oz. The World Platinum Investment Council (WPIC) forecasts a fourth consecutive year of supply deficit (297 koz), with an average deficit of 329 koz through 2030, signaling re-emerging structural shortages. This is expected to drive lease rates higher, exacerbated by China holding an estimated 80% of above-ground platinum stocks, effectively limiting Western market access. Other precious metals also performed strongly: Silver climbed to USD 65.85/oz (+13.2% MoM, +59.9% YoY), and Palladium reached USD 1,352/oz (+6.9% MoM, +17.8% YoY). The broader commodity market reflected this strength, with the Bloomberg Commodity Index up 9.6% MoM, WTI Crude oil up 13.3% MoM, and Copper up 2.6% MoM.

Key decisions and events shaping the coming months

1. September 16: The Federal Open Market Committee (FOMC) meeting, where markets anticipate a ~65% probability of a 25 basis point rate hike.
2. Early 2027: The Federal funds rate is expected to reach approximately 4.25%, reflecting the Fed's commitment to curbing inflation.
3. March 17, 2027: Another FOMC Meeting, with a 40% probability of the funds rate reaching 4.5%, indicating sustained hawkish pressure.

Summary for investors

Investors in precious metals face a nuanced landscape. While gold's underlying demand and long-term tailwinds from US dollar weakness remain, the Federal Reserve's hawkish stance and rising interest rates pose immediate challenges to its upward momentum. Platinum, however, presents a compelling long-term opportunity due to its deepening structural supply deficit and the potential for significant price and lease rate appreciation, despite recent technical resistance. Strategic positioning in platinum, alongside a watchful eye on Fed policy and the US dollar, will be crucial for navigating the coming months.

The content presented is for educational and informational purposes only. This material does not constitute investment advice or a recommendation suggesting an investment strategy, nor does it provide investment advisory services. OANDA TMS Brokers bears no responsibility for investment decisions made based on this content. Investing involves the risk of capital loss. Past performance does not guarantee future results.