Gold prices (CM:XAUUSD) fell 5.5% from a three-month high of $4,697 to trade near $4,375 on September 1. New bets on Federal Reserve rate hikes caused the price drop, as higher interest rates hurt non-yielding assets. Barchart noted that gold broke below its 200-day moving average near $4,529, which marks its first multiple daily closes under that line since early June.
Despite the slide, Goldman Sachs ($GS) backed its $4,900 price target for the end of 2026 in an August 28 note. This forecast shows roughly 10% upside from current price levels. Lina Thomas, senior commodities analyst at Goldman Sachs, and Daan Struyven, co-head of Global Commodities Research, noted that ongoing central bank buying of gold supports their view.
Central Bank Demand Fuels Long-Term Gold Prices
Central bank buying serves as the main engine for long-term gains. Goldman Sachs expects central bank gold buys to average 50 tons per month in 2026, up from 17 tons per month before 2022. Central banks buy gold to spread out reserves and protect against geopolitical risks.
At the same time, money supply models from Fidelity ($FIS) put gold value near $5,000 against global M2 cash levels, which sits 13% above current prices. However, short-term risks stay tied to Federal Reserve moves. Goldman Sachs previously warned that rate hikes could keep gold near $4,400, testing the asset alongside Bitcoin in the debasement trade.
Federal Reserve Hawkish Tone Pushes Bitcoin Under $78,000
Bitcoin faces similar headwinds as higher rate expectations weigh on risk assets. Following hawkish comments from Federal Reserve Chair Kevin Warsh at Jackson Hole, traders raised expectations for a September rate hike above 65%. As two-year Treasury yields climbed, Bitcoin fell below $78,000 to trade near $77,815.
Even with the short price dip, big buyers keep loading up on Bitcoin. Large holders bought over 39,000 Bitcoins worth roughly $3 billion in just one week. Staying above $76,871 could help push the price back up toward $82,206 as traders wait for new job and inflation reports.
At the time of writing, Bitcoin’s price is sitting near $77,815.
