Gold surged 15.3% month-to-date in August before easing to a 13.4% gain, one of its best months since the dollar gold standard ended in 1971. The rally has since stalled after Fed Chair Kevin Warsh's Jackson Hole remarks revived September rate-hike bets, pulling futures down toward the 4,432–4,454 support zone.
Gold's August breakout has run into a wall. After a month that saw the metal skyrocket as much as 15.3%, futures pulled back sharply once markets recalibrated Federal Reserve rate expectations.
An unusually strong August
Gold entered August still bruised from a rough June, when it plunged 11.6% on fears the Fed would raise rates. The mood shifted fast. On August 5, gold jumped 4.1% with no clear news catalyst, then extended gains after the US Treasury said it would expand buybacks of longer-dated bonds. Traders treated that move like a form of quantitative easing. Gold rose another 3.9% that day. By Tuesday, month-to-date gains had reached 15.3% before easing to 13.4% at Wednesday's data cutoff.
Jackson Hole reverses the momentum
That momentum broke down after Fed Chair Kevin Warsh's comments at the August 28 Jackson Hole symposium. Reuters reported gold falling roughly 3% as traders raised expectations for a September rate increase, which strengthened the US dollar and lifted Treasury yields, pressuring non-yielding bullion. Futures fell from a 4,755 swing high to an intraday low of 4,495. Gold futures were then trading at $4,483.80 while defending its 20 EMA support.
Support levels now in focus
Traders are now watching the 4,432–4,454 zone as the key downside support, with a break below opening the way toward 4,378 and 4,333. A recovery back above the 4,571–4,593 range would suggest the decline is an exhaustion move rather than a deeper reversal. The World Gold Council points to longer-term support from growing Treasury supply and fiscal deficits, setting up a conflict between near-term rate-hike pressure and longer-term safe-haven demand.
Sources: Commodities Analysis & Opinion, Commodities Analysis & Opinion, Commodities Analysis & Opinion
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