Gold recovers losses

The primary driver of today's movement is a shift in market expectations regarding interest rate hikes in the United States. The market-implied probability of an upward move at the September meeting is decreasing (approximately 50% today, compared to over 60% yesterday).

Figure 1: Change in Market-Implied Probability of an Interest Rate Hike at Federal Reserve Meetings (2026 - 2027)

Source: XTB Research, 03.09.2026

This is primarily the consequence of relatively dovish communications from Christopher Waller, one of the FOMC policymakers. Unlike Warsh, Waller clearly outlined today the specific factors he will monitor when making the September decision.

He stated that the disinflation process is progressing and that core inflation looks fundamentally even better than the main indicators suggest. He noted that if the upcoming CPI inflation reading (scheduled for 11 September) does not present a negative surprise, he will most likely support holding interest rates steady at the next meeting.

Weaker dollar also supports

The American currency is weakening by nearly 0.5% today, which is benefiting precious metals and cryptocurrencies. Selling pressure appears to be driven by both the aforementioned repricing and the dynamic strengthening of the yen.

Figure 2: Performance of Selected Currencies [vs. USD] (03.09.2026)

Source: XTB Research, 03.09.2026

The Japanese currency is recording very strong appreciation today (over 2% against the dollar). There is little indication that this is the result of direct market intervention. The last few hours, however, have brought relatively hawkish communications from Bank of Japan members, including Hajime Takata. He stated that the bank should be more aggressive than the market expects, indicating a need for dynamic interest rate hikes to suppress the gathering inflationary pressure.