Gold maintained its elevated, choppy trading pattern on Tuesday, with futures and spot prices both retreating sharply after a recent rally. COMEX gold futures for the front-month contract dropped $102.20, or 2.29%, to settle at $4,358.50 per ounce, while COMEX silver futures fell $4.56, or 6.64%, to $64.09 per ounce. Spot gold declined $85.24, or 1.94%, to $4,316.76 per ounce, and spot silver slid $3.69, or 5.48%, to $63.60 per ounce.

According to precious metals media outlet Kitco, Goldman Sachs' global head of metals trading, Anthony Kim, said in a podcast on Monday that the relative underperformance of the gold market since February "is not the end of the bull market, merely a pause." Kim suggested that gold is poised to reach new record highs in the medium term. The investment bank projects gold to hit $4,900 per ounce by the end of 2026, with $4,000 representing a fairly solid floor of support. Goldman advises investors to use data-driven volatility ahead of the Federal Reserve's policy meetings to gradually build long positions as prices approach the $4,000 level.

UBS strategist Joni Teves, in the firm's Global Precious Metals Commentary released the same day, outlined two clear scenarios. If the Fed raises interest rates in September, gold prices could experience a brief dip, but the decline is expected to be manageable, supported by improved seasonal physical demand and bargain-hunting from institutional investors at lower levels. Conversely, if the Fed opts to hold rates steady, gold could see a stronger upside reaction, as easing short-term rate pressure combines with gold's long-term diversification appeal, potentially driving gains that exceed the downside in a rate-hike scenario.

Meanwhile, continued official-sector gold purchases are providing significant structural support for prices. The latest data shows that the People's Bank of China purchased 650,000 ounces of gold (approximately 20 tonnes) in August, marking the largest monthly increase since October 2023 and extending its buying streak to 22 consecutive months. A recent World Gold Council survey revealed that nearly 90% of central banks polled expect global official gold reserves to continue growing over the next 12 months, with 45% of central banks planning to increase their own gold holdings.