Spot gold remained under pressure in early‑Tuesday trade and dropped to $4325.50 per troy ounce at one point, down roughly $137 from the overnight high. It broke two key support levels laid out by a senior futures strategist on the previous day. Phil Streible, Chief Market Strategist at Blue Line Futures, previously noted that his first “sentiment‑shifting” level was a close below $4350, while another critical “make‑or‑break” threshold stood near $4378.
As of 10:39 Eastern Time, spot gold traded at $4364.50, down $82.30 or 1.85% on the day. While this price remained above Streible’s $4350 “view‑changing” mark, it had fallen below his so‑called “last line of defence” near $4378. Nevertheless, Streible emphASIsed that he focuses on closing prices rather than intraday lows, so Tuesday’s brief intraday breach alone would not invalidate his assessment.
Gold Pullback or Correction Within a Larger Trend
Despite successive gold losses, Streible maintained on Tuesday that most of this selling episode may already be behind us. He pointed out that gold had once dropped $150 in a single session, and after an approximately $600 advance, such a pull‑back looks more like a normal correction rather than a full‑fledged trend reversal.
Over longer time horizons, gold has seen extreme volatility this year: it hit a record high above $5500 per troy ounce in late January, then retreated below $4000 by late June. In August, gold climbed roughly 10%, marking its best monthly performance since January, though it still trades around 7% lower year‑to‑date.
Mining equities exhibited even more dramatic swings. The NYSE Arca Gold Miners Index rose 33% in August, its strongest August reading in more than 30 years and over three times spot gold’s concurrent gain. Prior to that rally, the index had fallen 39% from its March peak.
Bond and Oil Markets Are the Real Weight on Gold
In Streible’s view, gold’s current weakness stems not from flaws within bullion itself but from bond‑market and crude‑oil dynamics driving overall market sentiment. On Tuesday, the US 30‑year Treasury yield hovered near 5.28%, having closed above 5% across 55 trading sessions so far this year — the highest tally since 2006. The 10‑year US Treasury yield briefly broke above 4.75% on Monday for the first time since January 2025.
This was not exclusive to the United States. Long‑dated yields in Germany, the United Kingdom and Australia also touched multi‑year or all‑time highs that same morning, signalling pressure on long‑term interest rates globally. Meanwhile, Brent crude oil advanced above $92 per barrel after missile strikes targeted oil tankers in the Strait of Hormuz. Over the weekend, US military forces had struck rocket launchers on Iran’s Larak Island, further ratcheting up geopolitical risks.
Higher energy prices amplify inflation concerns, and traders pricing in inflation tend to build higher rate‑hike odds into markets. Markets now price nearly 70% probability of a 25‑bASIs‑point rate increase at the Fed’s September 15‑16 meeting, compared with roughly one‑third ahead of Fed Chair Kevin Warsh’s Jackson Hole speech last Friday. Fed Governor Michael Barr also stated on Tuesday that the central bank should stand ready to raise rates if inflation fails to cool.
At a global finance ministers’ gathering, US Treasury Secretary Scott Bessent downplayed disruptions to the Strait of Hormuz, arguing that pipelines would soon provide alternative routes bypassing the waterway.
Streible: Inflation Driven by Supply Shocks, Rate Hikes May Not Be the Right Remedy
Streible does not deny inflation exists, but stresses its differing sources. Current pressures stem largely from supply‑side factors rather than overheated demand: 50‑percent tariffs on Canadian goods, Iranian attacks lifting crude‑oil prices, and assaults on Russian Black Sea ports pushing wheat to three‑year highs. These represent “supply shocks”, effectively acting as taxes passed on to consumers.
US 50‑percent tariffs on more than 550 categories of Canadian goods took effect August 22, marking the first‑ever activation of provisions under the 1930 Tariff Act and covering approximately $20 billion worth of merchandise. Canada will implement dollar‑for‑dollar retaliatory countermeasures starting September 8.
Wheat hit a three‑year high last week after Ukrainian drones targeted grain terminals at Russia’s Novorossiysk port, while Russian August export volumes reached only roughly two‑thirds of their five‑year average.
“Rate hikes are designed to cool demand, yet they cannot produce more oil, cannot produce more wheat, and cannot conjure tariff‑related infrastructure out of thin air,” Streible commented. “If central banks hike rates to fix minor problems that will resolve themselves over time, they risk inflicting far greater economic harm.”
He further argued that a Fed rate increase at the September 16 meeting would constitute a policy misstep that might need quick reversal. One supporting observation relates to yield‑curve dynamics: the 2‑year versus 10‑year Treasury yield spread has narrowed to roughly 39 bASIs points, a marked flattening after steepening earlier this summer. According to Streible, whenever the Fed raises rates amid a flattening yield curve, markets tend to prove more accurate and the Fed acts prematurely, ultimately forcing subsequent rate cuts.
Gold performs better in stagflationary environments — periods combining rising prices alongside slowing growth — and suffers notably under deflationary conditions. In other words, gold could regain support should economic slowdown coincide with peRSIstent inflation ahead.
Silver, Platinum and Palladium Face Concurrent Pressure
Silver fell 2.46% on Tuesday to $64.78 per troy ounce, touching an intraday low of $64.15. Streible outlined support levels for silver somewhat below this mark. He warned against seeing silver break the psychological $60 level. $62 corresponds to its 50‑day moving average, while $63.25 lines up with levels seen when the US Treasury buy‑back plan was announced. On the upside, his next target stands at $73.65, the 200‑day moving average.
Streible also pointed out that silver’s supply dynamics differ from gold’s. Roughly 70% of silver output comes as a by‑product of copper, lead and zinc mining, so higher silver prices will not quickly stimulate new supply.
Platinum traded at $1768 per troy ounce on Tuesday, and palladium at $1304 per troy ounce with a 2.83% loss. Both extended Monday’s declines.
Focus Ahead: Employment Data, Inflation and the Fed Meeting
The U.S. Bureau of Labor Statistics reported on Tuesday that July job openings rose to 7.27 million, above June’s downward‑revised 7.18 million, while lay‑offs dropped to the lowest reading since January. The ISM Manufacturing Index eased to 54.6 in August, staying in expansion territory for an eighth consecutive month.
Markets will next turn to the August employment report due at 20:30 Beijing Time on Friday, August 30. Economists expect roughly 55 000 new jobs, below repair‑oriented expectations after July’s‑23 000 reading. Consumer Price Index data will be released September 11, followed by the Fed’s September 15‑16 policy meeting accompanied by updated economic projections. For gold, near‑term pressure may peRSIst if yields keep climbing and rate‑hike expectations intensify. Conversely, gold could regain safe‑haven and stagflation‑trade support should data reveal slowing growth alongside sticky inflation.