Gold's Best Week Since January as Fed Hike Odds Collapse
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- Gold fell from a 10-year high over $5,300 an ounce early in 2026 by as much as 18%, but last week was its best week since January, with mining stocks posting their hottest five-day run since 2008.
- Federal Reserve rate hike expectations dropped over 20 percentage points in a single week after tame CPI data (0.1% monthly, 3.4% annual; core 2.5%) and a soft non-farm payrolls report; the Fed has held rates at 3.50–3.75% all year and September was live for a hike until the payrolls miss.
- The People's Bank of China added 19.9 tons of gold in July, its largest monthly addition since October 2023 and its 21st straight month of accumulation, in line with sustained central bank buying globally.
- New Fed Chair Kevin Warsh has altered the market landscape with what one broker calls "cautious and often ambiguous statements," driving money toward gold as investors question whether the Fed can hit both sides of its mandate.
- Gold miners like AngloGold Ashanti and Newmont are trading on single-digit forward P/Es, with the Van Eck Gold Miners ETF (GDX) moving roughly three times the underlying metal's price last week.
- Brent crude near $90 with the Strait of Hormuz still closed and Iran holding conditions on reopening has kept forward inflation risk alive, per fund manager Patrick Kennedy, even as the July CPI print cooled.
Why it matters: This isn't a rate cut trade — the Fed is parked at 3.50–3.75% and hike tail risk just got priced out (odds down 20+ percentage points in a week). That's a different setup than a cutting cycle, leaving more room for gold's directional bid. PBOC's 21st straight month of accumulation adds structural fuel.
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