Monthly data from the World Gold Council reveals that global physical gold ETFs saw inflows of approximately $18 billion in August, marking the second-largest single-month inflow on record. This surge lifted total assets under management across global gold ETFs by 16% to $615 billion, with aggregate holdings climbing 121 tonnes to 4,189 tonnes—a historic peak. Trading volumes across the worldwide gold market also picked up, with average daily turnover in major segments rising 21% month-on-month.

Despite the robust August inflows, momentum has not carried into September. With the Federal Reserve's September policy meeting approaching, international gold prices, as tracked by the New York gold futures main contract, have become increasingly volatile under pressure from profit-taking alongside a stronger US dollar index and rising real yields on US Treasuries. As of September 13, gold was quoted at $4,390 per ounce, reflecting a cumulative decline of 2.39% for the month.

Market analysts attribute the recent sharp swings in bullion prices to escalating US inflation expectations, which have reinforced market bets on a rate hike at the Fed's September gathering. August CPI data showed month-on-month increases of 0.4% overall and 0.3% for core prices—both exceeding forecasts—while headline inflation remains elevated at 3.4%. Fed Governor Christopher Waller had previously signaled that a rate increase would be unnecessary if August CPI showed declines or held steady, but would be warranted if it rebounded. Futures pricing via the CME FedWatch tool now indicates a 90% probability of a September rate hike.

Analysts note that the central bank's policy decisions hinge primarily on price stability and employment conditions, both of which have outperformed expectations. This has rapidly intensified expectations for a September hike, typically supporting the US dollar and Treasury yields while pressuring precious metals. Additionally, the sharp pullback in copper prices from earlier highs has weighed on sentiment in the broader metals complex, contributing to the ongoing correction in the sector.

However, there is a counterpoint: with a September rate hike now largely priced into the market, the negative impact may be increasingly limited. Should the Fed ultimately decide against raising rates, it could trigger a reverse positive reaction. If expectations for further tightening subsequently cool, there remains room for precious metals to rally.

Looking ahead, gold prices are likely to remain under pressure with a choppy trading pattern until the outcome of the Federal Reserve's September 15–16 policy meeting is known. From a technical perspective, key support on the downside is identified at the $4,300 per ounce level.