Gold, silver sink as Warsh revives September Fed-hike trade
(Kitco NewsWire) – Spot gold and silver prices are sharply lower in late-afternoon U.S. trading Friday, after Fed Chair Kevin Warsh used his Jackson Hole speech to reinforce the central bank’s inflation fight, lifting short-end yields, firming the U.S. dollar and forcing a heavy unwind in precious metals. At the time of writing, spot gold was trading near $4,456.00 an ounce, down 3.14%, while spot silver was trading at $66.210, down 4.24% on the session.North American equity markets closed lower, though the major indexes still posted weekly gains. The S&P 500 fell 0.2% to 7,711.76, the Dow Jones Industrial Average was down less than 0.1% at 53,559.99, the Nasdaq Composite lost 0.5% to 26,402.42 and the Russell 2000 dropped 1.4% to 2,972.37. European markets finished higher, with the STOXX Europe 600 up 0.51% to 655.16, London’s FTSE 100 up 0.29% to 10,824.26, Germany’s DAX up 0.77% to 26,569.99, France’s CAC 40 up 0.98% to 8,401.18 and Italy’s FTSE MIB up 0.67% to 52,616.12.The latest positioning shifted sharply toward a more hawkish Fed path after Warsh’s speech and the Labor Department’s payroll benchmark revision. Warsh said the Fed’s job is to deliver stable prices and signaled that persistent inflation remains the dominant risk, while the preliminary benchmark revision showed March 2026 payrolls were overstated by 79,000 jobs, far smaller than the large downward adjustment some traders had feared. September hike odds jumped to 57.5% from 35.9%, the two-year Treasury yield rose 11.8 basis points to 4.348% and the dollar index gained 0.5% on the day. For gold, the signal was clean: the labor-data revision did not deliver the dovish shock bulls needed, and Warsh’s tone pushed the opportunity cost of holding non-yielding metals back to the center of the trade.Precious metals were the clear casualty of the rate repricing. Gold fell through its 200-day moving average at $4,526.24, slipped below the $4,481.78 bear-market threshold cited in the latest technical work and tested its $4,504.07 to $4,458.52 retracement zone. Silver’s $70 breakout failed, with the metal sliding through $69.96, $69.50 and $67.69 before stabilizing above the $66.00 session low. The move leaves silver’s breakout structure damaged but not fully broken, while gold’s break below the 200-day average makes the next few sessions a test of whether the selloff is a Warsh-driven flush or the start of a broader technical reset.The Strait of Hormuz remains the main geopolitical channel into oil, inflation expectations and defensive demand, but Friday’s market impact came through easing supply fears rather than a fresh crude spike. Oil fell as traders assessed rumors of a possible shipping agreement through the strait and signs that more crude is moving despite the six-month U.S.-Israel war against Iran. Seven commodity vessels transited Hormuz Thursday, down from 17 a day earlier and below the 10-day average of 15, while front-month Brent settled at $89.31 a barrel and Nymex crude was near $83.18. For gold, that left less geopolitical offset against the hawkish Fed shock: lower oil eased part of the inflation premium, but the unresolved Iran conflict and sanctions risk kept a defensive bid in the background.The key outside markets see Nymex WTI crude oil prices lower and trading around $83.18 a barrel, while Brent crude was near $89.31. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.7% area. The U.S. dollar index is firmer. (Kitco Global Index shows how much of today’s gold move is the dollar versus the gold market itself.)Technically, spot gold bulls’ next upside price objective is to push prices back above the $4,504.07 resistance level, with a sustained move targeting $4,526.24 and then $4,604.00. Bears’ next near-term downside price objective is a break below $4,458.52, with deeper downside targets at $4,319.60 and then $4,230.51. First resistance is seen at $4,504.07 and then at $4,526.24. First support is seen at $4,458.52 and then at $4,319.60.Spot silver bulls’ next upside price objective is to drive prices back above $67.69, with a move above that level targeting $69.50 and then $69.96. The next downside price objective for the bears is a break below $66.00, with deeper downside targets at $65.66 and then $64.20. First resistance is seen at $67.69 and then at $69.50. Next support is seen at $66.00 and then at $65.66.See live precious metals prices for gold, silver, platinum and palladium — in USD, CAD and 12 more currencies.
Wall Street holds out hope for gold despite fall to $4,445/oz, Main Street pares bullish majority with payrolls now in focus
(Kitco News) – Gold prices saw another dramatic week, as early momentum from dollar weakness and lingering fiscal concerns reversed after Fed Chair Kevin Warsh used his Jackson Hole speech to reinforce the central bank’s inflation-fighting stance and revive expectations for a September rate hike.Spot gold kicked off the week trading at $4,618.79 per ounce on Sunday evening, and the yellow metal pushed higher through Monday as traders continued to digest the prior week’s Treasury buyback announcement and its implications for long-term yields, U.S. debt sustainability, and hard-asset demand. The rally extended Tuesday, when softer consumer confidence and trader positioning ahead of Wednesday’s inflation and growth data helped gold set its weekly high of $4,697.66 per ounce.Gold’s advance began to falter on Wednesday morning, even after core PCE inflation and second-quarter GDP data did little to change the broader view that the U.S. economy remains resilient while inflation remains elevated. Gold slipped back below $4,600 as yields firmed and traders became more cautious ahead of Warsh’s Jackson Hole remarks.Selling accelerated Thursday as stronger Fed rate-hike expectations, a firmer U.S. dollar, and higher short-term Treasury yields pressured non-yielding assets. Spot gold fell to its then-low of $4,566.17 per ounce on Thursday, before momentum shifted once again, with traders bidding the precious metal all the way up to $4,631.98 early Friday morning.But Warsh’s hawkish tone from Jackson Hole turned sentiment sharply bearish, and gold prices fell well over 1% in the hours that followed. Spot gold ultimately set the weekly low of $ 4,445.45 just before 3 pm ET, before the metal managed a modest uptick to close the week at $4,455 per ounce.The latest Kitco News Weekly Gold Survey showed half of Wall Street still bullish even after gold’s dramatic Friday slide, while Main Street sentiment pulled back from last week’s high-water mark.“Lower,” said Adam Button, head of currency strategy at investingLive. “He can pretend it’s not forward guidance, but Warsh signaled that he’s going to hike in September. Pricing has risen to 50/50, but it needs to get to +80% for a hike.”Marc Chandler, managing director at Bannockburn Global Forex, said gold was already struggling to maintain upside momentum after peaking near $4697 earlier this week.“The momentum indicators are rolling over, and I look for a stronger dollar ahead of the US jobs data at the end of the next week,” he said. “I anticipate a break of $4555, with losses extending toward $4500-$4527.”“That was quick,” Chandler added after Warsh’s speech provoked gold’s steep slide. “I am thinking now $4440, and maybe $4360.”“Up,” said James Stanley, senior market strategist at Forex.com. “I think we’re seeing a healthy pullback after the Warsh speech, and I think that longer-term the path is still the same as there’s no mention or thought of austerity, or of the US government borrowing less. I think the speech was designed to try to keep Treasury yields in check, but at the end of the day, I do not expect Warsh to err on the side of hawkishness, so I’m still bullish gold on that basis.”“42,” said Darin Newsom, senior market analyst at Barchart.com. “You may be wondering about my answer. Some will recognize it from The Hitchhiker’s Guide to the Galaxy as the ‘Answer to the Ultimate Question of Life, the Universe, and Everything.’ What does it tell you about my thoughts on Gold next week? I have no idea.”“Last week, I was with everyone else in saying the market should go up, based on continued bullish fundamental factors,” Newsom said. “When I found out Kitco’s poll last week was “bereft of bears”, my ‘Blink’ reaction was that the market would go lower. And it has, after initially closing higher Monday. While I have no idea what next week might bring, fundamentally speaking I’d rather be long than short long-term.”“Unchanged,” said Adrian Day, president of Adrian Day Asset Management. “After the largest monthly gain since 1999, gold is due for a pause, and Federal Reserve chairman Kevin Warsh’s big Jackson Hole speech may provide the rationale. But it will be only a pause: the size of the fiscal deficits around the world with high-debt servicing costs and the stubbornness of inflation, with the former arguing against the rate hikes that the latter requires, demonstrate the dilemma to which gold is the only answer.”“Up,” said Rich Checkan, president and COO of Asset Strategies International. “Federal Reserve Chairman Warsh will resist higher interest rates because of the $40 trillion debt. Treasury Secretary Bessent is trying to manage the yields on Treasuries for the same reasons. All their solutions are inflationary in the long term.”“Gold is going higher,” Checkan said. “Dips should be viewed as short-term. Embrace them to buy well.”Daniel Pavilonis, senior commodities broker at StoneX Group, told Kitco News that Friday’s move lower in the metals was the culmination of all the morning’s data combined with Warsh’s hawkish tone.“Rates look like they’re [heading] higher, and I think that’s putting pressure on the metals,” he said. “The dollar being up so much, that’s going to pressure commodities, and the possibility of raising rates in December, that might contain any kind of bullishness in the metals.”That said, Pavilonis thinks the economy looks fine overall. “Inflation is not too far out of range, and it seems like the economy is growing, earnings are fine,” he said. “So what’s the problem? Are they jawboning the market and talking about higher rates to signal restrictiveness, and let things go?”He noted that the rate hike odds for September have moved higher, and December’s odds moved a lot higher, while the yen has weakened versus the dollar. “These are all negative signs for the metals to move higher,” he said.Pavilonis agreed that Friday’s price declines were likely just the metals digesting the news and finding their new level based on the updated rate expectations. “The hard inflation without any kind of restrictiveness from the Fed is bullish for metals,” he said. “With a little bit of hawkishness, it’s not going to be an easy path forward.”Going forward, Pavilonis said he wants to see how this plays out over the next couple of weeks. “If the inflation story just dies down a little bit, maybe there is a true deal with Iran and Iran and oil starts flowing normally, then things start to roll over a little bit,” he said. “The inflation data looks a little bit more positive. I think that would be a pretty good risk environment for the metals.”This week, 21 analysts participated in the Kitco News Gold Survey, with Wall Street sentiment split fairly evenly between the bulls and everyone else. 10 experts, or 48%, expected to see gold prices gain ground during the week ahead, while six others, or 29%, saw the yellow metal falling further. The remaining five analysts, representing 24% of the total, called for consolidation at the new lower levels, or saw the yellow metal’s drivers as evenly split.Meanwhile, 207 votes were cast in Kitco’s online poll, with Main Street investors scaling back their bullish majority after gold’s late-week weakness. 121 retail traders, or 59%, looked for gold prices to rise next week, while 44 others, or 21%, predicted the yellow metal would lose ground. The remaining 42 investors, representing 20% of the total, expected to see sideways trading during the week ahead.Next week’s economic news is focused on U.S. employment, but market participants will also be watching key manufacturing and services sector surveys, along with two central bank rate announcements.The calendar kicks off on Tuesday morning with the ISM Manufacturing PMI for August, as well as JOLTS job openings. Later in the evening, the Reserve Bank of New Zealand will issue its monetary policy decision.Wednesday morning brings ADP private sector nonfarm payrolls, followed by the Bank of Canada’s monetary policy decision. Then on Thursday, markets will watch for weekly jobless claims, followed by the ISM Services PMI.The week’s data culminated with the Friday morning publication of the Nonfarm Payrolls report for August, with traders looking to see if the U.S. government’s key employment metric will undershoot expectations for a fourth straight month.Fawad Razaqzada, market analyst at Forex.com, said gold has moved below the key $4,655 resistance area he was watching earlier this week.“At the time of writing, the metal was below the 200-day but was testing the short-term bullish trend line,” he said. “Next support is seen around the 4436 and then 4400 area. It would be a bearish technical development if the buyers don’t show up are those levels.”Sean Lusk, co-director of commercial hedging at Walsh Trading, told Kitco News that precious metals were up ahead of Warsh’s speech before giving it all back, but the stock market didn’t see much of a negative reaction.“We’ve had a nice $500 bounce here,” he said of gold’s recent rally. “Silver has regained some footing, rallied $15 dollars off the summer lows, and crude oil is subdued. The market was starting to really fear that we’re heading back towards $100, and it stopped dead in its tracks at $87, $88, which gives more credence to [the idea that while] not a lot of barrels are moving out of the Strait, some are moving, and they’re finding other ways, and other countries have stepped up production.”“I wouldn’t want to be short [oil] personally, but that’s where we’re at here.”Lusk said that he believes Warsh is signaling that rate hikes are in the pipeline.“He meant his words,” Lusk said. “They’re probably going to do a quarter-point, and they’re going to price it in, so I think it’s become more of a reality. But we’re also starting a new month next week, we’re going to have a new round of employment data next Friday, and we’re going to look at that.”“For the market, we just can’t get too far ahead of ourselves,” he cautioned, “because there’s so many interchangeable parts: tariffs, trade wars… I think they’re just taking their time in a step-by-step approach. But it seems like a lot of [FOMC] members are leaning towards a tightening policy near-term here.”As for the metals in particular, Lusk expects them to stay bid up until the midterms. “Once an unknown becomes a known, that’s when you’re going to sell off. Seasonally, they run the gold market up into early September, then they back it off again, run it up again in October, it’s Diwali in early November, and then they back it off again, and then it gets cranked from November into mid-December around Christmas. I’m looking [at gold from] that seasonal bias and perspective for the remainder of the year.”But the midterms – and the potential for political upheaval – could still disrupt the seasonal patterns. “That doesn’t take into account any ‘black swan’ entering in the market from here.”Alex Kuptsikevich, senior market analyst at FxPro, expects gold prices to climb from their Friday lows next week, and said the late-week selloff has cleared a path higher.“Gold corrected in the second half of the week, taking a breather after an 8.5% rally over five trading days, with spot prices hovering around $4,700,” he wrote. “During the latest correction, gold found support from buyers on dips towards 4,600, signalling fairly strong buying interest. The impressive performance of palladium (+7% on Friday) and silver (+2.5% for the week, hitting new highs since June and rising above $70) suggests that what is happening with gold is nothing more than a local shake-out.”“The rise in gold that began five weeks ago started from the classic 61.8% Fibonacci retracement level, which suggests a resumption of upward momentum, as does the strength of the subsequent rally,” Kuptsikevich said. “In light of this rise, the latest profit-taking should effectively alleviate short-term overbought conditions, clearing the way for the price to move higher. The impressive rally in related markets (other precious metals, cryptocurrencies, selected equities) merely confirms the global appetite for assets outside the dollar zone, driven by the Treasury’s intentions to limit the sell-off of Treasuries and the Fed’s Warsh turning a blind eye to inflation.”Michael Moor, founder of Moor Analytics, expects to see gold prices post fresh gains next week.“In a Higher timeframe: I cautioned on 8/16/18 the break above $1,183.0 warned of renewed strength,” he wrote. “We have seen $4,443.1. These are OFF HOLD. We held exhaustion with a 56268 high and rolled over $1,651.1. This is OFF HOLD. On a medium timeframe basis: The trade below 52554 projected this down $740 (+)—we attained $1,300.0. The trade below 52036 brought in $1,248.2 of pressure. The trade below 51606 brought in $1,205.2 of pressure. These are ON HOLD. We held exhaustion with a 49177 high after a pullback and rolled over $962.3. The break below 48185 projected this down $185 (+)—we attained $863.1. The trade below 47923 projected this down $205 (+)—we attained $836.9. The break below 47420 brought in $786.6 of pressure. These are ON HOLD. We held macro exhaustion with a 39554 low and bounced $799.6—if we continue in a bona fide bullish correction, the minimum target is 49636. This is OFF HOLD.”“On a lower timeframe basis: We held exhaustion with a 40190 low and bounced $736.0,” Moor said. “The trade above 41192 brought in $635.8. On 8/4 we left a bullish reversal—we have rallied $632.6 from the 41224 open. The break above 41389 projects this upward 345.00 (+)—we attained $616.1. On 8/5 we left a major bullish reversal—we have rallied $449.8 from the 43052 close. The break above 44170 (-3.6 tics per/hour) has brought in $338 of strength. The break above 44311 (+13 tics per/hour) has brought in $323.9 of strength. The trade above 44853 (-2 tics per/hour) has brought in $269.7 of strength. Taking out 46240-71 was a sign of continued strength—we have rallied $127.9 since then. A maintained gap lower will leave a minor bearish reversal.”At the time of writing, spot gold last traded at $4,454.99 per ounce for a loss of 3.36% on the week and 3.20% on the day.See live precious metals prices for gold, silver, platinum and palladium — in USD, CAD and 12 more currencies.
Gold price falls to $4,543/oz after payrolls revisions show -79,000 jobs in 12 months to March 2026
(Kitco News) – Gold prices are lower after the latest U.S. employment data showed a relatively small downward revision to the nonfarm payrolls numbers over the last year.“The preliminary estimate of the Current Employment Statistics (CES) national benchmark revision to total nonfarm employment for March 2026 was -79,000 (-0.1 percent),” the U.S. Bureau of Labor Statistics announced on Friday. “The preliminary benchmark revision for total private employment was -178,000 (-0.1 percent). The annual benchmark revisions over the last 10 years have an absolute average of 0.2 percent of total nonfarm employment.”Spot gold fell sharply to a session low of $4,543.80 in the wake of the revisions, which were released at the same time as Fed Chair Warsh’s Jackson Hole speech and final consumer sentiment, and last traded at $4,564.05 per ounce for a loss of 0.83% on the session.The final benchmark revision will be incorporated into official estimates with the publication of the January 2027 Employment Situation news release in February 2027.
Gold prices drop 1% as Warsh says inflation is a bigger concern than a slowing labor market
(Kitco News) – The gold market is seeing significant selling pressure as Federal Reserve Chair Kevin Warsh reiterates his commitment to bringing inflationary pressures back in line with the central bank’s 2% target.Friday, in his much-anticipated speech at the annual Central Bank Symposium in Jackson Hole, Wyoming, Warsh said that the price-stability side of the Federal Reserve’s mandate is more of a concern than the slowing labor market.“There are always areas of concern in the labor market—for example, among recent graduates. In general, though, people who want to work, by and large, are holding or finding jobs. They may well be concerned about possible future labor disruptions, but as of now, I believe the labor markets are consistent with full employment,” Warsh said in his speech. “But on the price-stability side of our mandate, the numbers are more concerning. The Fed’s preferred measure of inflation, the 12-month change in the PCE price index, stands at 3.7 percent, while the six-month change is 4.1 percent.”“We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do. That’s our job . . . our mandate . . . and our charge to keep,” he added.Although Warsh provided no forward guidance on U.S. monetary policy, analysts note that his focus on inflation would suggest a tightening bias.The gold market is seeing some solid selling pressure in its initial reaction to Warsh’s comments. Prices have dropped well below $4,600 an ounce as markets once again start to price in a potential rate hike as early as next month.Spot gold last traded at $4,552.00 an ounce, down more than 1% on the day.
Gold steadies near $4,590 as claims dip, Fed hike risk stays live
(Kitco NewsWire) – Spot gold and silver prices are little changed to weaker in early U.S. trading Thursday, as a firmer rates backdrop offset bargain hunting after Wednesday’s post-PCE pullback. At the time of writing, spot gold was trading near $4,588.50 an ounce, down 0.10%, while spot silver was trading at $67.950, down 0.06% on the session.Gold moved off the lower end of its overnight range after weekly jobless claims fell to 203,000 for the week ended Aug. 22, below the 208,000 consensus estimate and down from a revised 207,000 the prior week. Continuing claims fell to 1.778 million for the week ended Aug. 15, against expectations for 1.790 million, keeping the labor-market signal too firm to give bullion a clean rate-relief trade.The latest market positioning is still being shaped by Wednesday’s data stack. July PCE inflation rose 0.2% on the month and 3.7% from a year earlier, while core PCE rose 0.2% and 3.3% year-over-year. Q2 GDP was unrevised at a 1.5% annualized pace. The combined message left September pricing tilted toward a Fed hold, but kept a year-end hike live: futures implied a 36.5% probability of a 25-basis-point September hike and a 72.7% probability of at least one hike by December. That has kept the 10-year Treasury yield near the 4.7% area and the dollar steady to firmer, limiting gold’s response to softer risk sentiment.Traders are watching the EIA natural gas inventory report at 10:30 a.m. ET, Chicago PMI Friday at 9:45 a.m. ET, final University of Michigan consumer sentiment Friday at 10 a.m. ET and Fed Chair Kevin Warsh’s Jackson Hole remarks Friday at 10 a.m. ET. Warsh’s speech is the main policy risk because markets are looking for a clearer inflation reaction function after the July PCE print kept the Fed’s 2% target problem in focus.The Strait of Hormuz remains the main geopolitical transmission channel into oil, inflation expectations and defensive flows. Qatar’s prime minister is heading to Iran to restart talks, while Iran and Oman are working on a framework to manage the strait after nearly six months of conflict left the route effectively closed to normal Gulf energy exports. Shipping activity has improved only marginally, and the market is treating reopening talk as a partial relief valve, not a settlement. For gold, that keeps the signal mixed: lower oil risk premium reduces one safe-haven impulse, but any renewed disruption would feed inflation and rate-risk concerns back into bullion.The key outside markets see Nymex WTI crude oil prices firmer and trading around $82.41 a barrel, while Brent crude was near $88.35. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.7% area.The U.S. dollar index is steady to firmer near 99.2. (Kitco Global Index shows how much of today’s gold move is the dollar versus the gold market itself.)Technically, spot gold bulls’ next upside price objective is to push prices back above the $4,607.79 to $4,652.45 resistance zone, with a sustained move targeting $4,699.60 and then $4,744.26. Bears’ next near-term downside price objective is a break below $4,560.63, with deeper downside targets at $4,511.00 and then $4,468.82. First resistance is seen at $4,607.79 and then at $4,652.45. First support is seen at $4,560.63 and then at $4,511.00.Spot silver bulls’ next upside price objective is to drive prices back above the $69.981 to $71.213 area, with a move above that zone targeting $73.713 and then $74.346. The next downside price objective for the bears is a break below $67.481, with deeper downside targets at $66.213 and then $63.713. First resistance is seen at $69.981 and then at $71.213. Next support is seen at $67.481 and then at $66.213.See live precious metals prices for gold, silver, platinum and palladium — in USD, CAD and 12 more currencies.
‘Gold is a clear beneficiary of de-dollarization… and we think it can continue to climb’
(Kitco News) – Gold is benefiting from a reinvigorated de-dollarization trade, and the monumental fiscal challenges facing the United States could push the yellow metal’s price above $5,400 by next summer, according to commodity and currency analysts at UBS.“Investors’ focus on the long-term shift away from the US dollar, known as de-dollarization, has increased recently amid renewed concerns about the US fiscal outlook,” the Swiss banking giant’s Chief Investment Office wrote in a note on Tuesday. “Over the past month, the DXY dollar index has fallen 2.4%.”(Kitco Global Index shows how much of today’s gold move is the dollar versus the gold market itself.)UBS believes that the dollar might receive some near-term support from the conflict in the Middle East and high oil prices. “But we think that gradual diversification away from the US dollar—and a depreciation trend over the medium to longer term—will remain intact, underpinned by continued concerns over the US fiscal trajectory, uncertainty around trade policy, and growing evidence that many countries are diversifying their reserve holdings away from the US currency,” the analysts said, adding that investors should consider exposure to gold, broad commodities, and certain global currencies to benefit from diversification.UBS highlighted gold’s potential in the current environment, saying the yellow metal’s current rally has room to run higher. “Gold is a clear beneficiary of de-dollarization, as investors consider bullion a reliable store of value and an alternative to traditional reserve currencies,” the CIO wrote. “The gold price has risen around 15% this month, and we think it can continue to climb amid further pressure on the US dollar.”UBS also expects markets to scale back their expectations for Federal Reserve rate hikes, which would also be supportive of higher gold prices. “Recent data point to continued demand for the precious metal—investment flows into gold exchange-traded funds (ETFs) have resumed, while central bank purchases remain robust,” the analysts noted. “In July, the People’s Bank of China increased its gold reserves by 20 metric tons, the largest monthly increase since October 2023. We forecast gold prices to reach USD 5,400/oz over the next 12 months.”UBS also suggested looking beyond gold to the broader commodity complex to benefit from diversification. “Gold is not the only asset that can hold its value when traditional currencies lose purchasing power,” they wrote. “A broad allocation to commodities can provide an additional source of long-term returns and help protect portfolios if rising inflation expectations challenge equities and bonds. Oil demand remains strong, and we expect it to continue growing over the coming years, particularly in emerging markets. Industrial metals should also benefit from long-term demand linked to electrification, the energy transition, and the ongoing global buildout of AI infrastructure.”The CIO also suggested diversifying into other currencies. “[W]e think the current environment is supportive of selective exposure to higher-yielding currencies, including the British pound and the Norwegian krone, they said. “We also like the New Zealand dollar given the hawkish policy bias of the country’s central bank, and the Chinese yuan amid strong export-driven FX inflows. Select emerging market currencies may also offer carry opportunities.”“[A]s the long-term shift away from the US dollar continues, we think exposure to gold, broad commodities, and select currencies can help support returns and manage portfolio risks,” they added.In mid-August, UBS strategists said that falling real rates will drive investors back into gold this year, with a weaker dollar and strong central bank demand helping to propel prices back toward $5,000 per ounce in the first half of 2027.In a client note, the Swiss banking giant pointed out that prices successfully broke out of their recent $100 trading channel to rise above the $4,250 resistance area for the first time in two months. “Reported Chinese institutional buying and inflows into exchange-trade funds (ETFs) have supported the latest price movement, while recent joint government efforts by the US and Japan to stabilize the yen may also have helped reduce the risk of a sell-off in US Treasuries,” they wrote. “Near-term risks remain, especially if US data stay firm, oil prices keep inflation concerns alive, or markets continue to price in a more hawkish Federal Reserve rate path,” the strategists warned. “But while the immediate backdrop may remain volatile, the medium- to long-term case for gold still looks supported by several durable drivers. We expect gold prices to rise toward USD 5,000/oz in the first half of 2027.”UBS expects lower real interest rates will help to reignite investment demand for the yellow metal. “[W]e expect inflation to gradually moderate, allowing the Fed to hold interest rates steady this year before resuming easing in 2027,” they said. “This should create a more favorable backdrop for gold, as a shift toward lower policy-rate expectations would likely reduce real yields, weigh on the US dollar, and help boost investment demand for gold.”A softening U.S. dollar and ongoing diversification flows are also powerful medium-term tailwinds for the gold price. “The US dollar may stay resilient in the near term, but structural challenges including large US fiscal and external deficits and already elevated investor allocations to US dollar assets mean there is scope for renewed weakness,” the strategists wrote. “A weaker dollar has historically been a powerful tailwind for gold, while a renewed focus on diversification away from the US dollar should benefit the precious metal.”Meanwhile, sovereign gold purchases continue to provide a firm price floor beneath the market. “Central bank demand has remained an important pillar of support, even when private investment demand has been lackluster,” they said. “We expect annual central bank purchases to remain elevated, supported by a long-term desire to reduce exposure to USD assets.”UBS noted that central banks bought 289 tonnes of gold in Q2, and their in-house estimates project full-year purchases to total between 750-1,000 tonnes in 2026. “While these flows may not be enough to drive prices sharply higher on their own, they can help stabilize the market and offset weaker areas such as jewelry demand.”The Swiss bank advised investors to separate gold’s near-term trading risk from its longer-term investment case. “[P]eriods of weakness toward USD 4,000/oz or below may ultimately prove to be opportunities to build strategic exposure,” they said. “For investors with an affinity for real assets, we continue to view a mid-single-digit gold allocation as appropriate within a well-diversified portfolio.”On May 26, UBS cut its year-end 2026 gold price forecast from $5,900 to $5,500 per ounce, citing risks of persistent headwinds from elevated Treasury yields and sustained U.S. dollar strength.UBS analysts Dominic Schnider and Wayne Gordon wrote at the time that investors are shying away from the yellow metal as yields stay high.“Markets are rediscovering the concept of opportunity cost, with gold’s non-yielding characteristics once again becoming a more important consideration as real rates remain elevated,” they wrote.See live precious metals prices for gold, silver, platinum and palladium — in USD, CAD and 12 more currencies.
$5,000 gold is back in play, and $10,000 is a matter of ‘when, not if’
(Kitco News) – Gold’s recent correction appears to have done little to damage its long-term investment case, and with concerns over unsustainable sovereign debt returning to the forefront of global financial markets, one strategist sees $5,000 an ounce by year-end firmly back in play.However, Aakash Doshi, Head of Gold Strategy at State Street Investment Management, said in an interview with Kitco News that investors should be thinking beyond gold’s next milestone. In the current global fiscal environment, he sees $10,000 gold as ultimately a question of timing rather than possibility.Doshi’s bullish outlook comes as gold prices have rallied roughly 15% in August, their best monthly performance since January 1999. Spot gold last traded at $4,621.30 an ounce, down 0.79% on the day.He explained that the “debasement trade” that drove gold to record highs earlier this year never disappeared. Instead, it went dormant as rising interest rates and a stronger U.S. dollar created significant headwinds for the precious metal. (Kitco Global Index shows how much of today’s gold move is the dollar versus the gold market itself.)“At State Street, we never thought it was dead; we just thought it was on pause,” he said. “And now I think it’s alive again.”Doshi said the renewed momentum comes as several important macroeconomic developments have shifted in gold’s favor. The Federal Reserve has yet to deliver on the market’s hawkish expectations, U.S. labor market data has softened and the Treasury Department’s decision to increase long-term bond buybacks has once again focused attention on America’s deteriorating fiscal position.He added that gold’s ability to hold $4,000 through its correction and subsequently rally back toward $4,600 to $4,700 has strengthened his conviction that the broader bull market remains intact.Doshi said State Street’s base-case range is now $4,750 to $6,500 an ounce by early next winter. Within that outlook, he sees the low-$5,000 area — roughly $5,000 to $5,250 — as a reasonable target, with the potential for the move to happen sooner than previously expected.A dovish shift from the Federal Reserve or another macroeconomic shock could potentially bring $5,000 into play as soon as the fourth quarter, he said.“We started to see inflows rebound aggressively from Western ETF investors,” Doshi said. “I think there’s plenty of firepower here to go.”Although monetary policy remains an important tactical driver for gold, Doshi said the much bigger issue facing global markets is the sustainability of sovereign debt.U.S. government debt recently surpassed $40 trillion, but Doshi said investors should not view the problem solely through an American lens. Fiscal deterioration and rising long-term borrowing costs have become global issues, affecting the United Kingdom, Europe and Japan as governments continue running substantial deficits even outside recessionary periods.He added that this environment will continue to create broad support for gold as a global monetary asset.“There is just a concern about the sheer level of debt, the amount of fiscal spending that’s happening during non-recessionary periods,” he said.This changing fiscal landscape is also forcing investors to rethink one of gold’s most important traditional relationships.Historically, higher bond yields — particularly higher real yields — have been negative for gold because they increase the opportunity cost of holding a non-yielding asset. However, Doshi said investors now have to ask why yields are rising.He noted that if yields are moving higher because economic growth is accelerating and investors are increasingly optimistic about corporate earnings, that environment could create legitimate competition for gold. But if yields are rising because investors demand a larger term premium to compensate for inflation, excessive government borrowing and deteriorating fiscal credibility, the implications are considerably different.In that environment, he said gold becomes less about opportunity cost and more about protecting purchasing power.“It becomes more, ‘I’m owning gold because of debasement and purchasing power risk and debt monetization risk,’” Doshi said, adding that recent market action suggests this argument is winning.Doshi said this dynamic helps explain why gold can remain resilient even as long-term yields stay elevated. A modest decline in real yields would provide a traditional tailwind for the precious metal; however, even sharply higher yields could support gold if the move reflects deteriorating confidence in sovereign debt and is accompanied by a weaker U.S. dollar, he said.“I think right now it’s a little bit of a confidence game,” he said. “Gold has no creditor, it is a scarce natural resource, and it has history behind it.”It is against this backdrop that Doshi sees an eventual path to $10,000 gold.He cautioned that such a move would not happen in a straight line and would depend on how broader financial markets respond to growing fiscal pressures. A recession, for example, could simultaneously boost gold and restore demand for government bonds, temporarily relieving some of the pressure that has fueled the debasement trade.Nevertheless, Doshi said the long-term direction remains clear.“I do think $10,000 is a question of when, not if,” he said.Importantly, gold would not require an extreme allocation shift among global investors to reach that level.Doshi noted that gold funds still represent less than 1% of global exchange-traded fund and mutual fund assets. If gold were to eventually become a 3% strategic allocation, roughly tripling its current share, he said that shift alone could generate enough investment demand to drive prices toward $10,000 an ounce.Meanwhile, he said that there are already indications that gold’s investor base is broadening.Doshi said Chinese investors were important buyers during the recent correction and helped establish strong support around $4,000 even as Western investment participation remained relatively limited. With gold subsequently rebounding toward $4,700, he said Western investors could be more willing to buy the next technical correction after seeing the strength of underlying demand.At the same time, physical demand remains resilient. Emerging-market central banks continued to buy aggressively during the second quarter, while Chinese retail investors accumulated record amounts of gold heading into the summer.For Doshi, those flows highlight an important distinction between the tactical forces driving gold from month to month and the structural forces supporting its longer-term role as a global monetary asset.Geopolitical fragmentation, rising military spending, growing fiscal deficits and concerns over sovereign debt sustainability have not disappeared. In some cases, he said, geopolitical turmoil has only intensified those pressures.“The structural was always there,” Doshi said. “Currently, the structural has become combined with the more tactical.”
Warsh needs to address ‘many outstanding questions about Fed policymaking’ at Jackson Hole
(Kitco News) – The Federal Reserve’s annual symposium in Jackson Hole, Wyoming will offer new chair Kevin Warsh the opportunity to lay out his vision for the central bank – and to address some early missteps and omissions, according to Natixis.Economists Christopher Hodge and Selin Aker wrote in Natixis’ Jackson Hole preview that Fed Chair Kevin Warsh has his work cut out for him at this week’s Fed symposium. “With long-term Treasury yields pushing toward multi-decade highs, some have pointed to the shaky July FOMC press conference and uncertain reaction function under Warsh’s leadership as contributing factors,” they said. “Thus far, Warsh has focused more on potential structural changes to the Fed and has eschewed forward guidance of any kind. He has also touted the ‘big picture’ issues that will shape the long-term trajectory of the economy and, in turn, policymaking.”“While it’s certainly appropriate to contemplate these lofty, ivory tower issues, investors now are looking for something more grounded – a clearer sense of the Fed’s reaction function and reassurance that the central bank has a credible plan for returning inflation to target,” they added. “We do think he will speak to the ‘big picture’ issues and the Fed’s task forces but will also ultimately give the market some of what it’s looking for as well.”Hodge and Aker said the common thread that runs through Warsh’s communication since assuming the chair is his focus on the supply side of the economy, and they expect that to remain the focus in Wyoming. “Warsh has been notably constructive on US productivity, arguing that the recent improvement began even before any meaningful boost from artificial intelligence,” they wrote. “If productivity accelerates, the economy could theoretically grow faster, wages can rise faster and unemployment can remain lower without producing the inflationary pressure a conventional Phillips-curve framework might predict.”“We don’t think Warsh will opine on the timing or magnitude of such structural shifts, but the implication that we would draw is that Warsh could be reluctant to impose yesterday’s estimates of these relationships on today’s economy,” they said, adding that “it would not be surprising if he expressed some skepticism about previous policy assumptions and generally struck an anti-doctrinaire approach.”The Natixis economists said the Fed chair will also need to address some of his statements from the July FOMC.“Warsh highlighted the increase in real and nominal yields in the intermeeting period and added that even though the Fed kept rates on hold, that ‘markets have done quite a bit,’” they wrote. “Similarly, Warsh said that ‘market participants are learning to play the ball, not the referee—and market prices will continue to respond in the direction and magnitude they see fit.’ Taken together, these statements could be interpreted as Warsh saying that tighter financial conditions could substitute for Fed action or that the Fed lacked agency in the fight against inflation.”They also pointed out that “even while repeatedly reiterating the commitment to bring inflation down to target, Warsh failed to articulate a strategy for doing so.”“[W]e think Warsh and the Fed would benefit from a clear and unambiguous statement that clarifies that if inflation stays high, the Fed will act and the policy rate will be the tool.”Hodge and Aker are also hoping to get some clarification on the role and scope of the Fed’s five new task forces.“It would be helpful if Warsh, without front-running the results of the work of the task forces, added some color in terms of the magnitude of the changes that could be coming down the road,” they said. “We suspect that the task forces will be used to hone and improve the status quo on the margin and not to enact wholesale changes. With this uncertainty present, clarifying that an evolution (not a revolution) is in store, would help to address one of the many outstanding questions about Fed policymaking.”
Gold sees profit taking even as US consumer confidence drops 89.4
(Kitco News) – The gold market continues to face modest selling pressure even as consumer confidence in the U.S. falls to its lowest level since the start of the year.The Consumer Confidence Index fell to 89.4 in August, down from July’s 90.8. The data was also below the economists’ consensus forecast of 90.3.According to the report, consumer pessimism was driven by future expectations. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—rose by 6.8 points to 121.2, ending three consecutive monthly declines, the report said. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—dropped by 5.8 points to 68.2.“Consumer confidence moderated slightly in August for a second consecutive month,” said Dana M. Peterson, Chief Economist at The Conference Board. “The Expectations Index slipped further into negative territory, which was offset by a moderate rise in the Present Situation Index after declining in the past three months. Consumer appraisals of current business conditions were mildly positive. Perceptions of the current labor market improved, reversing three months of moderate decline. Looking ahead, consumers were more pessimistic about business conditions and the labor market over the next six months. Expectations for household incomes moderated but remained optimistic overall.”The gold market is not seeing much reaction to the disappointing sentiment data. Spot gold last traded at $4,622.70 an ounce, down 0.62% on the day.
Gold remains a strategic hedge from underpriced inflation and policy risks
(Kitco News) – Renewed investor interest is providing new support for gold above $4,600 an ounce, and according to Société Générale, the precious metal will continue to play an important role in a diversified portfolio.Gold’s ability to withstand a stronger U.S. dollar (Kitco Global Index shows how much of today’s gold move is the dollar versus the gold market itself.) and higher interest rates is reinforcing its role as a strategic portfolio asset as investors face persistent inflation, geopolitical instability and growing policy uncertainty, analysts at the French bank said in their latest cross-asset strategy report.The analysts said they remain strategically bullish on gold, identifying the precious metal as one of seven assets investors can use to hedge against inflation risks. Société Générale’s broader strategy includes inflation-linked bonds, copper, select equities and private credit, with gold specifically positioned as a hedge against policy uncertainty.The latest comments on gold are broadly in line with the bank’s current portfolio positioning. In June, SocGen said that for the third quarter it would have a 10% allocation to gold, up from 7% in the second quarter. At the same time, SocGen increased its broader commodity exposure to 10% from 8%.The bank said it sees a growing disconnect between benign market-based inflation expectations and an economic environment that could keep price pressures elevated for longer than currently anticipated.Société Générale said a new wave of U.S. tariffs, accelerating artificial intelligence and infrastructure investment, volatile oil prices and persistently large government deficits across developed economies all point to a more inflationary medium-term environment.At the same time, the bank said current Federal Reserve expectations may not adequately reflect those risks. Markets were pricing roughly 35 basis points of tightening by the end of 2026 when the report was published, but Société Générale noted that even that would not be enough to bring monetary policy in line with the Atlanta Fed’s Taylor Rule calculation.That disconnect, the analysts said, reinforces the argument that “inflation risks remain underpriced and warrant dedicated portfolio protection.”The analysts also said gold should not be viewed as the portfolio’s only inflation hedge. Instead, Société Générale sees the metal playing a differentiated role within a broader strategy designed to protect against several potential sources of instability.The bank pointed to gold’s performance since mid-2025, when markets shifted from expecting additional Federal Reserve easing to debating whether policymakers would deliver one or two more rate hikes. That shift pushed two-year Treasury yields back above 4% and strengthened the U.S. dollar, while gold remained well above its mid-2025 levels.Société Générale said much of the hawkish adjustment in monetary policy has already been absorbed by financial markets. The analysts said it would take a significantly larger inflation shock accompanied by a much more aggressive Federal Reserve response to create another substantial repricing in interest rates.“With much of the hawkish adjustment already reflected in financial markets, the downside risk for gold appears increasingly limited,” the analysts said.The analysts also said the composition of gold demand is evolving in a supportive direction.Gold-backed exchange-traded fund inflows have moderated significantly this year, reducing the role of tactical and momentum-driven investors. Meanwhile, declining gold volatility has created what Société Générale described as a more attractive entry point for reserve managers.SocGen also pointed to central-bank demand as an increasingly important source of support for the market. China continues to increase its gold reserves, while broader reserve diversification remains a structural priority among many emerging-market central banks, the analysts said.“As speculative demand fades and official-sector buying remains robust, central banks are increasingly becoming the key anchor for the gold market,” the analysts said.Société Générale also linked gold’s portfolio role to broader geopolitical risks that could keep commodity prices and supply-chain costs elevated.The bank noted that renewed U.S.-Iran hostilities and tensions surrounding the Strait of Hormuz have increased the geopolitical risk premium embedded in oil markets. Even without major outright supply disruptions, the analysts said changes to shipping routes, inventory rebuilding and efforts to diversify supply chains could keep costs structurally higher.The bank warned that energy prices could stabilize without returning to pre-conflict conditions, creating more persistent inflation than falling spot oil prices might suggest.Société Générale’s broader portfolio strategy is designed to use different assets to address different inflation risks rather than relying on a single hedge.The bank described U.S. TIPS as its preferred direct inflation hedge, while copper provides exposure to inflation generated by infrastructure, electrification, AI investment and constrained commodity supply. Gold, by comparison, is positioned as a hedge against monetary, geopolitical and policy uncertainty.See live precious metals prices for gold, silver, platinum and palladium — in USD, CAD and 12 more currencies.
