Gold's five-hour chart confirmed a double top breakdown on Aug. 31, with price falling nearly 4% below its 20-bar average. The reversal follows the Fed's Kevin Warsh suggesting the FOMC may need to keep policy tight if inflation doesn't recede toward its 2% target, and it caps a week in which gold posted its fourth-worst weekly performance of 2026 so far.
A completed double top at gold's all-time high triggered the drop, and a bearish Marubozu candle confirmed the reversal alongside a SuperTrend shift to the downside at $4,633.95. Price has also broken below the Ichimoku cloud's dynamic support.
Momentum turns bearish, but RSI flags a possible bounce
The MACD shows an accelerating bearish crossover, with its line at -27.74 against a signal of 1.33. However, the five-hour RSI sits deep in oversold territory at 29.00, setting the stage for a potential relief bounce, though fighting the trend is risky.
A close below the 38.2% Fibonacci level at $4,449.55 would open the door to a drop toward the 200-day moving average near $4,272.70 and historical support at $4,150. Bulls need price to hold above the $4,449.55 Fib and form a reversal before targeting the former support at $4,566.50. The $4,400 to $4,500 zone stands as a chop zone with elevated whiplash risk, and bulls only regain the upper hand above $4,634.
Warsh's inflation warning weighs on the metal
Gold settled Friday at $4,504, snapping five consecutive up weeks. That marked gold's fourth-worst weekly performance of the 34 full trading weeks so far this year, down 3.4%, with Friday itself ranking as the 12th-worst single session of 2026's 166 trading days, down 3.2%.
The selloff followed remarks from the Fed's Kevin Warsh in Wyoming, who suggested the FOMC may have to tighten policy should inflation not recede toward its annualized 2% target. His cited Personal Consumption Expenditures inflation rate of 3.7% matches the 12-month summation average through July. The July-annualized reading comes in lower, at 1.8%, aided by slowing headline Consumer Price Index and Producer Price Index inflation.
Lower rates and yields tend to weigh on the dollar and support gold, while a tightening signal like Warsh's works in the opposite direction. The next test comes down to whether buyers can defend $4,449.55 before the oversold signal fades.
Sources: Investing.com, Investing.com
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