Gold held near $4,600 per ounce on Friday, putting the precious metal on track to finish the week with little overall change. Investors are now focused on Fed Chair Kevin Warsh’s remarks at the annual Jackson Hole Economic Symposium, looking for clues about the Federal Reserve’s upcoming interest-rate decisions.
Current market pricing suggests roughly a 65% probability that the Fed will leave rates unchanged in September. However, stronger-than-anticipated US inflation has increased expectations for another rate increase before the end of the year, with the implied probability of a hike by December still above 70%.
Gold is also receiving support from the so-called debasement trade, as investors seek assets that can preserve value amid currency depreciation and growing government debt. The US Treasury’s expanded bond-buyback program has raised additional concerns about the sustainability of US debt, while also placing renewed pressure on the dollar.
The geopolitical environment remains uncertain as well. Oil prices are staying elevated amid renewed tensions involving Russia, even as there are indications of diplomatic progress in the Middle East.
Technical Analysis
On the H4 XAU/USD chart, gold is consolidating around the $4,605 level. The technical setup points to a possible decline toward $4,511 in the near term, followed by a potential recovery toward $4,605 before another downward move toward $4,420.
The MACD indicator supports this bearish scenario. Its signal line remains above the zero line but is moving lower, suggesting that short-term downward momentum is still present.
On the H1 chart, XAU/USD recently completed a decline toward $4,564, followed by a corrective rebound to around $4,600. The market is now developing a broader consolidation pattern above the $4,564 support area.
A break below this range could trigger another move toward $4,511, with the potential for an extension toward $4,500.
The Stochastic oscillator also favors the downside, with its signal line below the 20 level and continuing to move lower. This indicates that short-term selling pressure remains dominant.
Conclusion
Gold remains relatively stable ahead of Fed Chair Kevin Warsh’s Jackson Hole speech, with investors looking for clearer signals about the direction of US monetary policy. Although markets currently expect interest rates to remain unchanged in September, persistent inflation has kept the possibility of a year-end rate hike above 70%.
At the same time, concerns surrounding currency depreciation, rising US debt, and debt sustainability continue to provide underlying support for gold. Geopolitical developments involving Russia and the Middle East are adding another layer of uncertainty to the broader market.
From a technical perspective, gold could face near-term downside toward $4,511 and potentially $4,500. The H4 setup suggests that a temporary rebound toward $4,605 could follow before another decline toward $4,420.
The market’s next major direction will likely depend on Warsh’s Jackson Hole comments and upcoming US economic data, which could provide important clues about the Fed’s policy path and gold’s next significant move.
Spot gold is trading around $4,481.29 per troy ounce, down 0.81% on the session after failing to break above the $4,510–$4,515 resistance zone during Asian trading. Meanwhile, the front-month COMEX gold contract stands at $4,537.00, down $8.30 or 0.18%, after reaching an overnight high of $4,550.80 before retreating toward $4,528.70 at the New York open. On the CFD market, gold has traded within an intraday range of approximately $4,463–$4,500.
Wednesday delivered the decisive move, with gold surging more than 3% to $4,480, its highest level since early June. The rally was primarily driven by a sharp decline in long-term US Treasury yields. Thursday’s pullback has erased only part of that advance, suggesting that the broader bullish structure remains intact despite renewed pressure.
Gold Rally Loses Momentum as Treasury Yields Recover
Gold’s recent performance highlights the uncertainty surrounding current market positioning. The precious metal has gained 9.90% over the past month and 34.19% over the past year, while its year-to-date advance stands at roughly 0.25%.
The price action has been volatile. Gold reached a record high of $5,602.23 on January 29 before falling sharply through March and April. After stabilizing near $4,457 in late May, the metal declined toward $4,065–$4,100 in late July before staging a recovery of more than 10% from the yearly low.
At $4,481, gold remains about 20% below its January peak. The current 52-week range stretches from $3,311.46 to $5,595.46, placing the metal in the upper-middle portion of a wide trading range.
The main obstacle for further gains is the renewed rise in long-term Treasury yields. The 30-year Treasury yield has climbed back to 5.236%, more than four basis points above Wednesday’s 5.196% close and only around 9.4 basis points below Tuesday’s 19-year high of 5.33%. Meanwhile, the 10-year yield is holding near 4.696%.
The sharp reversal in bond yields has partially undone the key driver behind Wednesday’s gold rally. Lower real yields reduce the opportunity cost of holding a non-yielding asset such as gold, while rising yields tend to have the opposite effect.
This region combines two important technical indicators: the 200-day Simple Moving Average (SMA) and the 61.8% Fibonacci retracement of the April–June decline. The convergence of these two indicators within a narrow price zone makes the resistance particularly significant.
The broader weekly resistance area extends from approximately $4,493 to $4,533, with $4,510–$4,515 positioned near its midpoint.
A weekly close above $4,533 would strengthen the bullish outlook and potentially expose gold to the next major resistance zone around $4,855–$4,894. Conversely, failure to clear $4,515 could send XAU/USD back into the six-week trading range that has dominated price action through the summer.
On the downside, the 50-day moving average at $4,386.29 represents the first major support level. Below it, $4,319 is particularly important as it corresponds to the 2026 yearly open and the 52-week moving average.
The $4,319 level previously acted as resistance but has since shifted into support, making this breakout one of the most constructive technical developments for gold since the March decline.
Additional support levels are located around $4,311, followed by the $4,284–$4,311 demand zone and $4,175. Stronger support is seen around $4,002–$4,017, while $3,887 represents a deeper defensive level before the yearly low region.
Momentum indicators remain broadly bullish. The daily RSI is at 65.17, approaching overbought territory but not yet reaching extreme levels. Daily MACD remains positive, while the broader technical signal remains Strong Buy across the daily, weekly and monthly timeframes. However, the hourly signal has shifted to Strong Sell, highlighting short-term exhaustion.
Wednesday’s Gold Rally Was Driven Primarily by Treasury Yields
The distinction between a yield-driven rally and a traditional safe-haven rally is important for assessing gold’s next move.
On Wednesday, the US Treasury announced that it would at least double the size of liquidity-support buyback operations involving longer-dated nominal coupon securities across the 10-year to 20-year and 20-year to 30-year sectors.
The maximum amount per operation was increased from $2 billion to at least $4 billion, with the new level scheduled to take effect from September 9 through November 4.
Following the announcement, the 30-year Treasury yield fell from 5.33% to 5.184%, while the 10-year yield declined from 4.68% to 4.637%. At the same time, the US Dollar fell to a three-month low, helping gold surge more than 3% to $4,480.
The relationship is straightforward. Gold does not generate interest income, meaning its opportunity cost rises when Treasury yields increase. When long-term yields fall while the US Dollar weakens, the relative attractiveness of holding gold improves.
However, the scale of the Treasury buyback program raises questions about how sustainable the yield decline can be. Doubling the buyback ceiling adds roughly $14 billion of potential capacity against approximately $32.2 trillion of outstanding marketable Treasury debt.
The Treasury is also not eliminating the underlying debt. Instead, it purchases older, less liquid securities while financing those purchases through new issuance. The overall amount of outstanding debt therefore remains largely unchanged.
As a result, Wednesday’s market reaction appears to have reflected the policy signal more than a fundamental change in Treasury supply dynamics.
Rising Treasury Yields Create a Headwind for Gold
The subsequent rebound in Treasury yields shows why gold has struggled to extend Wednesday’s rally.
The 30-year yield has returned to 5.236%, exceeding its level before the buyback announcement, while the 10-year yield has risen to 4.696%. In effect, much of the bond-market move that supported Wednesday’s gold rally has already been reversed.
The broader fiscal environment is also keeping pressure on long-term yields. US government debt has surpassed $40 trillion, while the July federal deficit reached $432.3 billion. Interest payments on the debt have also approached approximately $1.2 trillion this calendar year.
This creates a difficult environment for the Treasury, particularly as demand for long-duration government debt remains under pressure.
The rise in global bond yields adds another layer to the problem. Japan’s 10-year government bond yield recently reached a multi-decade high, while long-term yields in Germany, France, the UK, Italy, Switzerland and Canada have also moved higher.
For gold, rising nominal yields can be bearish because they increase the opportunity cost of holding bullion. However, if yields rise because of deteriorating fiscal conditions, inflation concerns or fears surrounding debt monetization, the same environment can support structural demand for gold.
At present, both forces are operating simultaneously.
Fed Policy Remains a Major Risk for Gold
Federal Reserve policy is another important factor limiting gold’s upside.
Minutes from the July 28–29 FOMC meeting indicated that several policymakers remained prepared to raise interest rates if inflation failed to make sufficient progress toward the 2% target. Three regional Fed presidents also dissented in favor of a rate hike at the meeting.
The federal funds target range currently stands at 3.50%–3.75%, while market pricing puts the probability of the Fed holding rates steady in September at around 69.9%.
The prospect of further monetary tightening creates a challenging environment for gold because higher interest rates and Treasury yields increase the opportunity cost of owning a non-yielding asset.
However, weaker economic indicators provide an important counterbalance. July nonfarm payrolls fell by 23,000, compared with expectations for an increase of roughly 83,000, while previous months were revised lower. Retail sales also declined 0.6% in July, significantly weaker than the expected 0.1% increase.
This combination of persistent inflation, slowing growth and softer labor-market conditions leaves the Federal Reserve facing a difficult policy trade-off.
The upcoming Jackson Hole event could therefore become an important catalyst for gold. A hawkish message could reinforce Treasury yields and push XAU/USD toward the $4,386 support level. A more cautious tone focused on labor-market weakness could instead help gold retest $4,533.
Geopolitical Tensions Fail to Trigger a Strong Gold Safe-Haven Rally
Another notable feature of the current market is gold’s inability to attract a significant safe-haven bid despite escalating tensions surrounding Iran.
Crude oil prices have responded more strongly to the geopolitical developments. September WTI futures have risen 2.38% to $86.40, while Brent crude has climbed above $94.
Yet gold has fallen 0.81% on the session.
The divergence suggests that investors are currently favoring the US Dollar rather than gold as the preferred safe-haven asset. Because gold is priced in US Dollars, a stronger dollar can place additional pressure on XAU/USD.
Geopolitical tensions could still support gold through a secondary channel. Higher oil prices can increase inflationary pressure, potentially limiting the Federal Reserve’s ability to cut interest rates. If inflation remains elevated while economic growth deteriorates, real yields could eventually weaken, creating a more favorable environment for bullion.
This transmission mechanism is slower than a conventional safe-haven rally but could prove more sustainable if energy prices remain elevated.
Gold Remains Far Below Its January Record
Despite the recent rebound, gold’s broader performance shows that the market has not yet returned to a clear new bullish phase.
The metal is up more than 34% year over year and nearly 10% over the past month, but its year-to-date gain is only around 0.25%. This means most of the annual gain was generated during late 2025 and January 2026, while the subsequent months represented a significant round trip.
Gold’s January record of $5,602.23 was followed by a sharp correction. The metal eventually stabilized near $4,457 in May before falling toward the $4,065–$4,100 area in July.
The August recovery has nevertheless been significant. Gold has gained more than 10% from its yearly low and broken decisively above the six-week consolidation range that had constrained prices throughout the summer.
At current levels, gold has recovered roughly 42% of the decline from the July low to the January record. That represents a meaningful technical recovery, but it does not yet confirm the beginning of a new long-term uptrend.
The $4,312–$4,319 region remains the key pivot. Holding above this zone would support the view that the March downtrend has been invalidated and that gold is entering a recovery phase. A sustained move below it, however, would increase the risk that the August rally was merely a countertrend rebound within a broader correction.
For now, gold remains caught between supportive structural factors, including fiscal concerns and geopolitical risks, and significant headwinds from elevated Treasury yields and expectations for a relatively hawkish Federal Reserve. The $4,510–$4,533 resistance zone therefore remains the critical barrier for determining whether the latest gold recovery can develop into a more sustained bullish move.
