Gold faces technical retreat as Fed hawkishness rattles markets

The World Gold Council reports that a hawkish tone from Fed Chair Warsh at the Jackson Hole Symposium acted as a catalyst for the recent sell-off. By signaling a commitment to curbing inflation, the Fed has driven up 2-year Treasury yields, effectively increasing the opportunity cost of holding non-yielding gold. This policy tension, coupled with persistent U.S. inflation data, has forced traders to recalibrate their near-term expectations for interest rate hikes.

Technically, the market is struggling to maintain its footing. Analysts point to a weakening daily RSI momentum and a decline in bullish options positioning as evidence of a developing sideways range. While global gold ETF inflows persist, the pace of accumulation has slowed significantly. Should the current bearish trend continue, the 55-day moving average at $4,215 stands as the critical support level. Conversely, a breakout above the 200-day moving average at $4,530 would be required to shift the near-term outlook back toward the recent highs of $4,774.