【TMGM Financial Recap】Bulls And Bears Battle At The 4600 Level, Walsh-Jackson Hole's Debut Is The Key Key To The Market's Future!
Spot gold fluctuated near the 4600 mark; the day before, gold prices had plunged 1.4%, marking the largest single-day drop in a week. On the surface, this is just daily volatility at high levels, but behind it lies a complex game of dollar surges and pullbacks, expectations of U.S. Treasury buybacks, sticky inflation, and uncertainty over the Fed's policy path.
Market attention was almost entirely focused on Fed Chair Walsh's first major public speech at Friday's Jackson Hole symposium. Investors hope to read the Fed's true assessment of inflation and the possible shift in future monetary policy.
Looking at capital flows, the current demand side includes ongoing ETF inflows and central bank allocation of gold as an alternative to the dollar. As investors await key signals from the Jackson Hole meeting, the market will remain cautious in the short term. In other words, although gold prices have already surpassed the $4,600 mark, upside momentum and downside risks coexist, and any policy statement could trigger a balance break.
Federal Reserve Chairman Wash will deliver a speech on Friday, marking his first public policy outline at such a major event since taking office. Investors especially hope he will take this opportunity to clearly outline the path to bringing inflation down to the 2% target and the role the bond market should play in this process. Wash has previously emphasized the need for the Fed to speak less to make price signals in the bond market clearer. However, U.S. Treasury Secretary Bescent's recent sharp increase in long-term bond repurchases has been seen by some market participants as proactive intervention in price signals.
After the Jackson Hole meetings over the past three years, regardless of specific policy signals, the dollar has often come under pressure around the end of the month, with speeches deciding more about the extent of capital flows than the direction. Current CME FedWatch tools show that the market's probability of a Fed rate hike in September has dropped to around 35%, but the probability of a rate hike in December remains as high as 74%. This cautious near-end and hawkish pricing at the far end is precisely the key background for gold's high-level fluctuations.
What worries gold bulls is still the stubborn performance of U.S. inflation. Data released on Wednesday showed that the Personal Consumption Expenditures (PCE) price index, which the Fed is most concerned about, rose 3.7% year-on-year in July, unchanged from June, and remained well above the 2% target for the 65th consecutive month. Although this figure did not exceed expectations by much, it was enough to prompt several Fed officials to publicly express concerns during Jackson Hole.
Market Insight:
Gold is no longer just a simple safe-haven commodity; it has become an important window to observe the credibility of Federal Reserve policy, the sustainability of U.S. fiscal policy, and the global shift in asset allocation. Walsh's Jackson Hole debut may not immediately provide the full answer, but it is likely to determine the rhythm of gold's volatility in the coming weeks or even months.
