On Monday, gold maintained a volatile adjustment pattern. Intensified bull‑bear tussles followed last Friday’s sharp decline. The hawkish fallout from the Jackson Hole Symposium continued to reverberate. Markets re‑evaluated the Federal Reserve’s monetary‑policy path and repriced odds of another tightening at the September rate‑setting meeting, pushing US Treasury yields higher and raising the opportunity cost of holding non‑yielding assets such as gold. Spot gold dipped as low as $4396.65 per troy ounce intraday. Bulls and bears then traded blows, and gold staged a weak rebound to close at $4448.88 per troy ounce, down 1.8%. Gold traded sideways early Tuesday before taking a sharp turn lower in the European session, breaking below the $4400.00 per troy ounce psychological level and hitting an intraday low of $4364.01 per troy ounce. At press time, it was trading below $4380.00 per troy ounce. Driven by the combined impact of spiking US Treasury yields and geopolitically‑fueled oil‑price surges, gold has tumbled rapidly in succession, showing signs of a one‑way trending move on the charts.
US President Trump stated on Monday that he would “hit Iran hard” after Iran launched missiles overnight at two US air bases in Jordan in retaliation for a US strike on Iran’s Larak Island. The renewed US‑Iran military conflict sent crude‑oil prices soaring and stoked market risks of further rate hikes by major central banks. Federal Reserve Chair Walsh’s speech at Jackson Hole last Friday reinforced market expectations for a September Fed rate hike. As September‑hike expectations mounted, US Treasury yields jumped further while the US dollar edged lower. The latest CME FedWatch Tool puts the probability of a September rate hike at 66.4%, sharply higher than roughly 35% ahead of Walsh’s speech last Friday.
This Friday’s US August Non‑Farm Payrolls report represents the most important indicator ahead of the September FOMC meeting. Markets currently expect roughly 58,000 new jobs in August. A markedly soft print could quickly cool rate‑hike expectations and open the door for a meaningful corrective rebound in gold. Conversely, strong employment data would amplify hike bets and subject gold to greater downside pressure. Meanwhile, markets await Tuesday’s US July JOLTS Job Openings report, forecast to fall to 7.39 million versus the prior 7.359 million. This report compiles US employers’ estimates of national job openings, hires and separations and draws close market attention. It is typically released ahead of a suite of employment indicators, with Friday’s Non‑Farm Payrolls serving as the main market focus.
For the near‑term gold outlook, spot gold faces upside resistance at $4700.00 per troy ounce, with downside support seen at $4300.00 per troy ounce.
Spot Gold Daily Chart
[Disclaimer]The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the views of SinoSound. SinoSound remains neutral regarding the opinions and statements contained herein and makes no representations or warranties, whether express or implied, regarding the accuracy, reliability, or completeness of the information provided.
The content of this article is intended for informational and reference purposes only. Readers should exercise their own judgment and assume full responsibility for any decisions or actions taken based on the information contained herein.
[Copyright Notice]This article is original content and is protected by applicable copyright laws. Any reproduction, distribution, citation, or use of this content must clearly acknowledge the original source:
Gold2U
www.gold2u.com
We reserve all rights and may take legal action against any individual or entity that fails to comply with this notice or otherwise infringes our intellectual property rights.