Gold’s price drops below $4340 per troy ounce as market participants continue to expect the Fed to adopt a more hawkish tone as their September meeting nears.
Research Takeaway
Gold is currently facing downwards pressures as a result of the market anticipating a 25bp rate hike by the Fed in their next meeting which is two weeks away. On the other hand, the geopolitical element is still there as tensions between the US and Iran flair up again. Although, as the markets grow used to such tensions, their impact may not be as significant gold’s price nowadays. Our main focus will be the release of the US Employment data on Friday as it has the potential to upend our views. Yet for now we opt for a bearish outlook for gold’s price.
Research Desk View: BEARISH
Gold in One Minute
| Metric | View |
| Bias | Bearish |
| Primary Driver | Fed interest rate expectations |
| Main Risk | US Employment data on Friday |
| Key Level | Hold below $4340 to preserve the thesis |
| Next Catalyst | US Employment data · 04/09/2026 / 15:30 GMT+2 |
The Gold Thesis
Gold’s near-term path is shaped by ongoing hawkish rhetoric which has emerged from Fed policymakers. Starting with Fed Chair Warsh on Friday, who stated that “while this summer’s [inflation] readings were better than expected, they do not tell me that underlying trends have meaningfully improved” and that “We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do”. Moreover, Fed Governor Barr stated yesterday that he would “if inflation appears not to be moderating sufficiently, then I think we should act decisively to raise rates.” In turn, the hawkish comments emerging from the Fed have resulted in the majority of market participants anticipating a 25bp rate hike in the Fed’s next meeting on the 15th of September, with FFF currently implying a 69.6% probability for such a scenario to materialize. In turn, a more restrictive monetary policy stance by the Fed could weigh on gold’s price. However, the US Employment data is due out this Friday and may thus upend our Gold thesis depending on the narrative which emerges, as it could influence the Fed heading into their meeting in two weeks’ time.
Gold Drivers
| Driver | Signal | Rationale |
| Rates | Bearish | Interest rate expectations for the Fed have risen |
| Risk Demand | Supportive | Elevated geopolitical uncertainty |
Key Events
| Event | Date / Time | Prior – Anticipated – Actual | Potential Impact on Gold |
| US Non-Farm Payrolls | Friday / 15:30 GMT+2 | [Prior: -23k] – [Anticipated: 55k] – [Actual: N/A] | Could weaken gold’s price |
| US Unemployment rate | Friday / 15:30 GMT+2 | [Prior: 4.1%] – [Anticipated: 4.1%] – [Actual: N/A] | Could support gold’s price |
| US Average hourly earnings | Friday / 15:30 GMT+2 | [Prior: 3.2%] – [Anticipated: 3.0%] – [Actual: N/A] | Could support gold’s price |
Technical Context
Gold is trading in a downtrend on the daily chart, with price action having cleared our support turned to resistance at the 4340 (R1) level. Momentum indicators such as RSI are bearish, which may imply that the bears maintain control of gold’s price. The market appears to have established structural levels at $4180 (S1) and $4340 (R1).For our bearish outlook to continue, we would require a break below our 4180 (S1) support level, with the next possible target for the bears being our 4020 (S2) support base. On the other hand, for a bullish outlook, we would require a clear break above our 4340 (R1) level, with the next possible target for the bulls being our 4250 (R2) resistance level. Lastly, for a sideways bias we would require gold’s price to remain between our aforementioned S1 and R1 support and resistance levels, respectively.
Short-Term Gold Levels
| Level | Price |
| Support (1) | $ 4180 |
| Support (2) | $4020 |
| Resistance (1) | $4340 |
| Resistance (2) | $4520 |
| Horizon | This week |
What Changes the View
| Signal | Development |
| 🟢 Confirms the Thesis | A strong US Employment report, showcasing a resilient labour market |
| 🟢 Confirms the Thesis | Continued hawkish commentary from Fed policymakers |
| 🔴 Challenges the Thesis | Significant escalation between the US and Iran on a military level |
| 🔴 Challenges the Thesis | Weaker than expected US Employment report |
The Gold Lens
Despite the elevated tensions in the Middle East over the past two days, the markets appear unfazed by the commentary. Although it may provide some support for gold’s price, it may not change the overall picture as we have grown accustomed to the tensions between the US and Iran.
Key Variables to Remember
| Indicator | Bullish for Gold | Bearish for Gold |
| Real yields | Falling | Rising |
| US Dollar | Weakening | Strengthening |
| Fed expectations | More easing | More tightening |
| Central-bank demand | Increasing | Weakening |
| ETF flows | Inflows | Outflows |
| Risk environment | Uncertainty | Risk appetite |
Disclaimer:
This information is not considered as investment advice or investment recommendation but instead a marketing communication.
