Gold prices rebound as turbulence in yen cross markets drags down the US dollar

　　US labor market data also missed expectations, weighing on the dollar. The ADP private employment report showed that the US private sector added 38,000 jobs in August, below the market expectation of 47,000 and the previous value of 46,000.

　　Even as the gold price sees a short-term rebound, the overall environment for gold remains challenging. After several weeks of relative calm, conflict has reignited in the Middle East, oil prices are on the rise, and inflation concerns have resurfaced, resulting in a global bond selloff. The yield on the US 10-year benchmark Treasury bond hit 4.81%, the highest since October 2023, then fell back to around 4.79%. Rising yields increase the opportunity cost of holding non-interest-bearing assets like gold, putting pressure on gold prices.

　　On Wednesday, New York Fed President John Williams stated: “Rising yields are due to strong economic fundamentals and positive outlooks—not driven by inflation expectations.” He also noted some connection between bond yields and the Middle East conflict.

　　On monetary policy, markets have increased their bets that the Federal Reserve will start raising rates in September. Last week, Fed Chair Kevin Walsh made hawkish comments on inflation at the annual global central bank meeting in Jackson Hole, further boosting rate hike expectations. The CME FedWatch Tool indicates that the probability of a rate hike at the September 15–16 policy meeting has risen to about 64%, up from just 36% a week ago.

　　Against this backdrop, if US dollar selling continues, gold could see further short-term recovery. But hawkish Fed expectations, high US Treasury yields, and inflation risks from Middle East tensions will limit additional upside for gold. Traders now focus on Friday’s US Nonfarm Payrolls report, as this data will shape market expectations for the Fed’s rate path and drive the next moves in the dollar, bond yields, and gold.

　　Spot gold is currently just holding the 100-day simple moving average near $4,361, offering fragile downside protection; however, the price remains below the middle Bollinger Band (around $4,450).

　　On the daily chart, the Relative Strength Index (RSI) hovers near the 50 dividing line, while the MACD histogram remains in negative territory; both indicators point to weakening bullish momentum, with the gold price in a generally neutral consolidation pattern.

　　Looking up, the first resistance is at the 20-period Bollinger Band at $4,450; if bulls regain control, the next key resistance will be the upper Bollinger Band at $4,685.

　　On the downside, the 100-day moving average at $4,361 provides immediate support, followed by the lower Bollinger Band at $4,215. If selling pressure intensifies and gold dives deeper, the next major support will be at the $4,000 round number level.

Editor: Guo Jian