Gold climbs as Fed comments temper hike odds

Federal Reserve Governor Christopher Waller stated on September 3, 2026, that he would be inclined to support keeping the federal funds rate at its current target at the upcoming September policy meeting if incoming data continue to show disinflation. His comments framed the decision as data dependent, emphasizing that the stance could change if inflation readings in the coming weeks prove unexpectedly strong.

Waller’s remarks highlighted the central bank’s focus on near-term inflation indicators as a key determinant of whether to adjust interest rates. By explicitly tying his position to forthcoming data, he underscored that the September outcome remains contingent on the economic releases scheduled before the meeting.

Following Waller’s comments, traders adjusted expectations for the September 15–16 Federal Reserve meeting. Market-implied probabilities indicated about a 54.6% chance of a rate hike after the remarks, reflecting a shift in perceived odds as investors incorporated the potential for rates to remain unchanged if disinflation persists.

The reassessment of policy prospects was visible across asset classes. Treasury yields moved to session lows, signaling reduced expectations for tighter monetary conditions in the near term. At the same time, S&P 500 (SPX) futures advanced, suggesting a more supportive backdrop for risk assets as the likelihood of an imminent rate increase was tempered.

In this environment of lower yields and moderated expectations for near-term rate hikes, gold prices (XAUUSD) strengthened. By 3:59 p.m. EDT on September 3, spot gold (XAUUSD) stood at $4,473.66 per ounce, reflecting a gain of about 2.10% on the day.

The move in bullion coincided with the drop in Treasury yields, which reduced the opportunity cost of holding non-yielding assets such as gold. The shift in Fed policy odds following Waller’s comments contributed to the demand for the metal, as investors responded to the prospect that interest rates might remain unchanged at the upcoming meeting if disinflationary trends continue.

With markets now focused on the inflation data that Waller identified as decisive, gold prices and broader asset valuations are closely tied to whether upcoming releases confirm continued disinflation or point to renewed price pressures.