Cooling expectations for gold's rally: Prediction markets put the probability of gold hitting $5,000 by year-end at just slightly above 50%

After rising nearly 10% in August, international spot gold has pulled back sharply, with market expectations for further gains cooling significantly. Polymarket data shows the probability of gold hitting $5,000 per ounce by year-end is just over 50%, the chance of reaching $4,500 is almost certain, while the likelihood of hitting $6,000 has dropped to around 13%; the probability of a short-term return to $4,700 is less than one-third. Affected by the Federal Reserve’s hawkish signals, U.S. Treasury yields, and rising oil prices, spot gold fell more than 2% at one point Tuesday to around $4,350 per ounce, a notable pullback from its previous high of roughly $4,697. After Fed Chair Waller delivered hawkish signals at the Jackson Hole Annual Meeting, market bets on a September rate hike rose to about 66%, and the yield on the 10-year U.S. Treasury note climbed to approximately 4.78%. Meanwhile, Brent crude oil broke above $91 per barrel, further intensifying inflationary pressures. Still, gold’s long-term bullish narrative has not faded: concerns over fiscal deficits, expanding government debt, and the U.S. dollar’s purchasing power continue to underpin gold prices. Citi forecasts gold will rise to $5,000 over the next 6 to 12 months, and has raised its short-term target to $4,800. The market will now turn its focus to U.S. employment and inflation data to gauge whether gold bulls can regain momentum.