Oil prices surge combined with hawkish Fed expectations, gold falls below $4,400

　　Major global bond markets have recently experienced sell-offs, with long-term government bond yields rising significantly. The US 10-year Treasury yield once rose to around 4.78%, and the 30-year yield approached 5.27%. This high-rate environment makes interest-bearing assets such as bonds more attractive to investors, while also increasing the opportunity cost of holding gold. The rise in oil prices has further amplified this effect. Heightened tensions in the Middle East have pushed crude oil prices higher again, reigniting inflation expectations due to heightened energy supply risks. The market’s trading logic has shifted from “geopolitical risk benefits gold” to “geopolitical risks push up oil prices, higher oil prices fuel inflation, and inflation reinforces rate hike expectations.” This shift means gold can no longer fully benefit from traditional safe-haven demand.

　　Federal Reserve Chair Kevin Walsh’s hawkish remarks at the Jackson Hole meeting were a key catalyst for the recent gold price adjustment. He emphasized that if policymakers cannot confirm that underlying inflation is falling toward the 2% target quickly enough, the Fed will still need to take further action. The market subsequently increased its bets on a September rate hike, with the associated probability now around 66%.

　　From a capital perspective, changing rate expectations are undermining gold’s short-term appeal. Analysis from ANZ notes that the market is adapting to the shift in the monetary policy environment, making gold more susceptible to selling pressure at present. Meanwhile, holdings in the world’s largest gold ETF have remained around 1,042 tons recently, with no clear sign of increased positions, indicating that investment funds remain cautious about chasing highs in the short term.

　　Nevertheless, gold’s long-term support has not entirely disappeared. Factors such as geopolitical risks, global fiscal pressures, and continued gold allocation by some central banks still provide long-term value support. Therefore, the current adjustment is better understood as a temporary shift in macro pricing logic rather than a complete reversal of gold’s long-term trend. Going forward, US economic data will be key to determining whether gold can stabilize. This week, the market will closely watch the JOLTS job openings, ADP employment data, and the August nonfarm payroll report. If the labor market remains robust, Fed rate hike expectations may intensify further, with US Treasury yields and the US dollar having room to rise, which would increase pressure on gold.

　　Conversely, if US employment data weakens significantly, leading the market to lower expectations for further Fed tightening, Treasury yields may fall and gold could regain allocation flows. Thus, the truly directional move for gold prices ahead will largely depend on the chain of transmission between “employment data — rate expectations — US dollar and Treasury yields.”

　　On the daily chart, gold has clearly pulled back from previous highs, with the market’s focus now on the support area around $4,350. If this area holds, gold prices could rebound toward $4,500–4,550; reclaiming $4,550 would bring attention to resistance near $4,600. Conversely, if $4,350 fails, attention will turn to possible further tests of the $4,300 and $4,200 regions. Overall, the short-term trend has shifted from strong highs toward a consolidation structure.

　　On the 4-hour chart, gold remains in a weak, choppy state in the short term, and its rebound momentum has not fully recovered. $4,500 has now shifted from support to a key resistance area; regaining this level will help ease short-term downside pressure, while persistent failure to rebound and another break below $4,350 could see bears testing $4,300. Current technicals favor waiting for a data-driven breakout in direction.

　　Editorial Summary

Editor: Zhu Henan