Gold Prices Under Pressure as Fed Hawkishness Lifts Yields
Gold | 2026-09-02 05:50:46
Strong economic data could increase expectations of an earlier rate hike, which in turn may put further pressure on bullion.
By Paul Ploumis
SEATTLE (Scrap Monster): Gold prices could come under renewed pressure as investor sentiment is likely to be impacted by rising global bond yields and a more hawkish outlook for US interest rates, said the Weekly Markets Monitor released by the World Gold Council (WGC).
The indications by Federal Reserve Chair Kevin Warsh that monetary policy could remain tighter than previously expected kept the markets unsettled last week. The US two-year Treasury yield saw a sharp jump, sending gold prices below its 200-day moving average. The LBMA Gold Price PM declined 0.4% last week to around $4,563 per ounce. Despite the weekly loss, gold has gained about 4.5% so far this year, the WGC report noted.
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Persistent US inflation and softer consumer confidence have added uncertainty to the economic outlook. Upcoming US employment figures and August ISM data could provide fresh clues about the Fed's next move. Strong economic data could increase expectations of an earlier rate hike, which in turn may put further pressure on bullion.
Technical indicators also point to a possible deeper correction. Gold faces initial support near $4,311 per ounce, followed by stronger support around its 55-day average near $4,215. On the upside, resistance is seen near $4,474 and $4,530.
Meanwhile, renewed US-Iran military tensions, expanded sanctions and trade disputes could offer some support to gold.
POLL
What is the biggest near-term risk to gold prices, according to the market outlook?
Frequently Asked Questions
- Why could gold prices face renewed pressure?
Gold could come under renewed pressure as rising global bond yields and expectations of a more hawkish US Federal Reserve increase the opportunity cost of holding non-yielding bullion. The jump in the US two-year Treasury yield has already unsettled markets and contributed to gold falling below its 200-day moving average.
- How could upcoming US economic data affect gold prices?
US employment figures and August ISM data could provide important signals about the Fed's next policy decision. Stronger-than-expected economic data could reinforce expectations for an earlier rate hike, potentially lifting Treasury yields and the US dollar while putting further downward pressure on gold.
- What are the key technical levels for gold?
Gold has initial technical support around $4,311 per ounce, with stronger support near $4,215, corresponding to its 55-day moving average. On the upside, resistance is positioned around $4,474 and $4,530 per ounce. A sustained break below support could signal a deeper correction.