Gold Prices Approach The 4700 Mark, PCE Inflation Data and Jackson Hole Speech—Will The Price Decide Whether To Continue Rising or Peak!
The U.S. Treasury's Treasury bond buyback is eroding the dollar's credibility, and weak inflation data weakens expectations for rate hikes, so the medium-term upside logic for gold remains unchanged. The market is focusing on PCE data and Jackson Hole's speech for further guidance. Spot gold fluctuated at high levels. TD Securities pointed out that this was merely a pause in the rally. Gold faced technical selling pressure as it approached the strong resistance level of $4,700, but the macro driving force that had driven gold prices higher over the past few weeks has not faded; instead, it continues to ferment on multiple fronts.
From a technical perspective, $4,700 has become a key stronghold that bulls must conquer. After reaching a high of $4,696.18, gold quickly pulled back, clearly indicating that as the key resistance level approached, short-term profit-taking and trapped positions formed resonant selling pressure. If gold prices can find effective support near $4,600 going forward, the next target could be $4,755 or even $4,850. However, if the $4,600 level is breached, it could further test the $4,519 area where the 200-day moving average is
located. Gold prices are currently at a critical crossroads; a breakout would open upside, while a pullback could lead to a phase of consolidation.
However, compared to a purely technical correction, what deserves more attention is whether the underlying logic driving gold prices up has fundamentally changed. The United States is beginning to send personnel back to some Middle Eastern diplomatic missions that had previously withdrawn or downsized due to tensions in Iran. This move indicates that Washington believes the risk of further escalation of the recent conflict has diminished, but Iran's vow of retaliation means geopolitical uncertainty is far from over. For gold, as long as the Middle East's powder keg is still smoking, the demand for safe-haven assets will not easily exit the market.
Last week, U.S. Treasury Secretary Besentte announced a landmark decision to at least double the quarterly repurchase of longer-term Treasury bonds. The direct purpose of this move is to ease the upward pressure on long-term U.S. Treasury yields, but the market has more keenly picked up on the signal behind it: the U.S. government is lowering borrowing costs by directly intervening in the bond market. Citigroup has lowered its forecast for the US dollar index for the next three months from 102.12 to 98.34, clearly turning bearish on the short-term trend of the dollar. The market generally believes that this move by the U.S. Treasury sends policy signals that are driving the dollar weaker. The weakening of the US dollar is precisely one of the most direct catalysts for gold's rise.
The market's main focus right now is undoubtedly the upcoming U.S. July Personal Consumption Expenditures inflation report to be released on Wednesday, as well as Federal Reserve Chair Walsh's speech at the Jackson Hole seminar on Friday. PCE data is so crucial because it is the Federal
Reserve's official measure of inflation. The market generally expects overall PCE to increase 3.6% year-on-year in July, with core PCE year-on-year holding steady at 3.3%. If core inflation even slightly declines, it would weaken the Fed's rationale for further rate hikes.
Market Insight:
Gold is oscillating at a 4-hour level high, with the MACD double lines and volume bars converging above the zero axis. This week's PCE data and Walsh's speech will provide investors with key clues as to whether the rally can continue. No matter how the data unfolds, gold is already above $4,600 and will set a higher price coordinate in the future.
