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Gold slips to two-week lows as Fed hike odds surge

Fed Chair Warsh’s hawkish Jackson Hole remarks lifted September hike odds to over 66%, pressuring XAU/USD as Treasury yields rose and Middle East tensions escalated.

Reported · Written up by our desk · Major Pairs

Gold prices pulled back sharply this week, falling to two-week lows near $4,320 after dropping 8.7% from last week’s three-month highs around $4,700, according to Action Forex.

The outlet links the move to a repricing of Federal Reserve expectations following Fed Chair Warsh’s hawkish Jackson Hole comments, in which he warned the Fed still had “work to do” without clearer evidence inflation is returning to target. September hike odds jumped from about 36% before his speech to more than 66% on the day of the remarks.

Action Forex also points to rising Treasury yields and renewed Middle East tensions after new US strikes and Iranian retaliation against the UAE and Jordan as additional factors weighing on gold.

All eyes now turn to Friday’s Non-Farm Payrolls report, which the outlet says could quickly change the hawkish outlook. It also outlines key technical levels for XAU/USD, with the pair trading between a 0.618 Fibonacci confluence near 4,265 and a 0.5 retracement/200-period EMA area around 4,348 to 4,367, framing how a jobs surprise could influence whether the correction extends or prices rebound into the Fed’s September 15 to 16 meeting.

Latest closeGold $4,376.80 ▼1.2%

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