Spot gold climbed to its highest level since mid-May, extending last week's 5 percent rally as dollar weakness and shifting Fed expectations drove bullion demand.
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Gold tops $4,650 as bond yields fall, Fed hike bets fade
Spot gold climbed to $4,635.25 per ounce, up 0.7 percent, the highest since mid-May, as lower yields and fading Fed bets weakened the dollar.
"The consolidation of gold prices above $4,600, and the potential for further gains, will depend to a large extent on the US dollar remaining under pressure and Treasury yields stabilizing at current levels or declining further," Ricardo Evangelista, senior analyst at ActivTrades, said.
COMEX gold futures rose 0.2 percent to $4,691.10. Tamer July US inflation data cooled expectations for near-term Fed policy tightening, shifting market expectations toward a policy hold at the September 15-16 FOMC meeting. The US Treasury said last Wednesday it would at least double buyback operations for long-dated government debt starting in September, with Treasury Secretary Scott Bessent reassuring markets the size could exceed $4 billion per issue. Traders price in about a 36 percent chance of a September rate hike and a 64 percent chance of a hold, per the CME FedWatch Tool.
Gold rose more than 5 percent last week after the Treasury's buyback plan pushed the dollar lower, making greenback-priced bullion more affordable for foreign investors. The July Personal Consumption Expenditures Price Index due Wednesday and Fed Chair Kevin Warsh's speech at the Jackson Hole Symposium on Friday are the next events that could move the metal.
Geopolitical risk also supports bullion. The US is set to announce what Treasury Secretary Scott Bessent called the toughest sanctions in history on Iran at a Monday press conference. Iran's Supreme National Security Council secretary, Mohsen Rezaei, warned the Islamic Republic would halt all oil exports through the Strait of Hormuz if economic war continues, keeping the war-risk premium in play.
Technical Levels Point to $4,684 Resistance
Friday's close above the $4,615-$4,620 confluence — comprising the 200-day SMA and the 61.8 percent Fibonacci retracement of the April-June decline — triggered fresh buying. The MACD indicator stays in positive territory with rising values, though the RSI at 71.77 shows overbought conditions that could limit immediate upside.
Any subsequent move up could face initial resistance at the 78.6 percent Fibo retracement near $4,684.43, above which gold could aim to test the cycle high around $4,891.38 — roughly 5.5 percent above current levels. On the downside, first meaningful support emerges from the 61.8 percent Fibo retracement at $4,521.97, reinforced by the 200-day SMA at $4,516.88, with deeper structural floors at the 50 percent retracement at $4,407.86 and the 38.2 percent level at $4,293.75.
Gold at $4,635 sits about 5.5 percent below the cycle high of $4,891.38 and roughly 2.5 percent above the 200-day SMA, a level that has historically acted as a key pivot for trend direction.
This article is for informational purposes only and does not constitute investment advice.
[1] Gold hits fresh high since mid-May as lower bond yields and fading Fed bets undermine USD[2] Gold hits over 3-month high ahead of U.S. inflation data, Fed chair speech[3] NZD/USD Price Forecast: Consolidates near June high as bulls await breakout through 0.6000[4] Indonesian Rupiah declines despite prevailing high interest rates, weaker US Dollar
