Precious metals markets have been rattled by investors' concerns over higher inflationary readings and the likelihood of Federal Reserve monetary tightening. Yet, over the past month, gold prices have climbed from around $4,000 per ounce to nearly $4,700 in the latter half of August. Most analysts attribute this surge to the U.S. debt reaching the $40 trillion mark, but the bond market has also played a significant role in this price recovery.
The Federal Reserve Here are a few quotes from the Fed: "The Fed's price-stability objective of 2 percent, as measured by the personal consumption expenditures (PCE) price index, is a firm, fixed target. Let's be equally clear about another aspect of the objective: Price stability is not self-executing, nor is inflation necessarily mean-reverting. It is the Fed's job to deliver stable prices." Additionally, in an interview at Jackson Hole, Cleveland Federal Reserve Bank President Beth Hammack stated: "I don't want to prejudge anything. But I believe now is the time to act." She also added, "I believe that we've been in an inflationary situation for more than five years. It's been running well above our target. I don't see any restriction in policy when I look at financial conditions and when I talk to market participants." In other words, the Federal Reserve's primary focus is currently on inflation. Thus, it appears clear that the Fed's stance is hawkish, and it is likely to tighten monetary policies soon and decisively. The Fed's position will only shift if the U.S. economy encounters serious hardships.
However, the unemployment rate - another key economic indicator - is not low enough to signal robust economic growth.
The US unemployment rate
Source: Trading EconomicsThe U.S. unemployment rate remains substantially above the low reached in 2023, currently hovering above 4%.
Moreover, consumer spending is not expanding either, as evidenced by the retail sales data presented below; in fact, retail sales contracted in July of this year.
Retail sales
Source: Trading EconomicsAlso, both manufacturing and non-manufacturing Purchasing Managers' Indices (PMIs) indicate very modest economic growth.
Manufacturing PMI reported by the ISM
Source: Trading EconomicsServices PMI reported by the ISM
Source: Trading EconomicsShould monetary conditions tighten further, the growth rate is likely to decelerate or even turn negative.
If the Fed tightens too aggressively, the U.S. economy is likely to slip into a recession. Moreover, higher interest rates would make servicing the U.S. debt considerably more expensive, especially given that the national debt has reached the $40 trillion threshold.
Even though the monetary environment may seem contractionary, the U.S. government has recently reported an exceedingly high debt level. It is well known that high government debt leads to currency debasement due to the expanding money supply. At the same time, such a hefty government debt is costly to service. Therefore, if the Fed raises interest rates, interest expenses will escalate further, boosting government expenditures and widening budget deficits. To manage the debt, the Fed would likely have to print more dollars to buy back Treasuries, which would also push down government bond yields - a necessity given the current debt predicament. This is exactly what is unfolding in the U.S. bond market right now.
The bond market Additionally, as I have discussed in previous articles, demand for U.S. debt is declining rapidly. Recently, Japan sold off some of its U.S. Treasury holdings to support the yen. Consequently, bond yields are rising, which increases interest expenses - a problematic trend given the U.S. national debt's $40 trillion milestone. This is why Treasury Secretary Scott Bessent announced that the Treasury would buy U.S. bonds to curb rising yields. This approach closely resembles a quantitative easing (QE) program, which is currently taking place despite the Fed's hawkish rhetoric.
What does this mean for Gold? Despite the Fed's hawkish stance and its potential negative impact on precious metals prices, the U.S. debt is surging while Treasuries lose their appeal. This situation makes a quantitative easing program necessary to keep debt servicing manageable. Quantitative easing entails money printing, which exacerbates currency devaluation and makes precious metals more attractive to investors - a trend that is likely emerging now. Therefore, even if the Fed raises interest rates, gold prices are still likely to rise as long as the Fed buys back Treasuries.
On Monday, the People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead at 6.7828 compared to Friday's fix of 6.7811 and 6.7344 Reuters estimate.
PBOC FAQs The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market.
The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts.
Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi.
Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.
Gold price (XAU/USD) attracts some sellers to near $4,445 during the early Asian trading hours on Monday. The precious metal edges lower on a surprisingly hawkish speech by Federal Reserve (Fed) Chairman Kevin Warsh at the Jackson Hole economic symposium.
The Fed Chairman warned on Friday that inflation is not slowing significantly and that unless policymakers become confident it is, the central bank has “work to do.” Traders raise their bets on a September rate hike following Warsh’s speech, marking the closest he has come to acknowledging interest rate hikes may be needed to ease price pressures.
Markets now see a 56.9% probability of a US rate hike in September, compared to 39.9% before Warsh’s comments, and an 88.7% odds of a December increase, according to the CME FedWatch tool. Gold is often used as a hedge against inflation but does not yield interest, making it less attractive when interest rates are high.
“Gold is getting slapped hard as Chair Warsh affirms that inflation isn’t meaningfully slowing and the Fed has ‘work to do.’ While it may once again be ‘speak loudly and carry a short stick,' this will make the market price the September meeting as a coin flip,” independent analyst Tai Wong said.
Meanwhile, ongoing tensions in the Middle East could raise oil-driven inflation concerns, weighing on the yellow metal. Bloomberg reported on Sunday that the US military struck Iranian rocket launchers that were preparing to send mines into the Strait of Hormuz, following weeks of relative calm. The attack by the US was the first military action against Iran in more than a month, as US President Donald Trump has switched to a campaign to squeeze Tehran’s economy.
Gold sentiment seen resilient even if Fed tone turns more hawkishAccording to TD Securities, a shift in tone from Fed Chair Warsh could test the recent optimism in precious metals, but is unlikely to fully derail it. The bank argues that “a more hawkish tone from Fed Chair Warsh would be a catalyst for some reversal in the yellow metal,” yet stresses that “the bar is likely high to reverse the improved sentiment in precious metals,” with positioning and underlying narratives still broadly supportive.
Warsh flags unfinished inflation work as financial conditions stay looseFed Chair Warsh delivered a notably more hawkish-leaning message, with an FXS Speechtracker score of 7.4 versus a 6.5 historical average, underscoring that the Fed must be confident underlying inflation is moving to target or “we have work to do.” Warsh highlighted healthy consumer spending, stable labor markets, and rapid business investment alongside “hard-pressed” characterizations of financial conditions as restrictive, while stressing that better summer inflation prints do not yet signal a meaningful shift in underlying trends and that the predominant focus must remain on prices. The emphasis on a firm 2% PCE target, durable-yet-fragile inflation expectations, and limited signs of policy restraint in credit and loan markets reinforces a bias toward keeping policy tight for longer, a backdrop typically supportive of the Dollar against lower-yielding peers.
The FXS Fed Sentiment Index was unchanged on the day, moving 0.00 points to hold at a still-elevated 129.70, firmly in hawkish territory despite the lack of incremental shift. The combination of a stable but high index reading and an above-baseline FXS Speechtracker score signals that Fed communication continues to lean hawkish overall, maintaining support for the Dollar while keeping markets sensitive to incoming inflation data and expectations.
Technical Analysis: Gold price is well-supported above the 100-day SMAIn the daily chart, XAU/USD holds a bullish near-term bias as price remains above both the 100-day simple moving average (SMA) and the 20-day Bollinger middle band, suggesting a well-supported uptrend despite the recent consolidation. The Relative Strength Index (RSI) at 54 keeps momentum in mildly positive territory, hinting that buyers still have the upper hand but without overbought conditions.
On the topside, immediate resistance emerges at the 20-day Bollinger upper band near $4,725, where a sustained break would open the way to fresh record highs. On the downside, initial support is seen around the current area and the Bollinger middle band at $4,430, followed by the 100-day SMA at $4,370; a deeper pullback could extend toward the Bollinger lower band at $4,135, where buyers would be expected to reappear.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
The Australian dollar snapped an eight-week winning streak after Fed Chair Kevin Warsh's hawkish Jackson Hole speech revived US rate-hike bets. Yet stronger Australian inflation and household spending have also raised expectations of another RBA hike, leaving AUD/USD caught between competing policy risks ahead of Australian GDP and US nonfarm payrolls.
The weak jobs report and a drop in core inflation would favor a hold. But it would likely delay tightening rather than end the cycle. After the speech by Warsh, there is possibility of at least a quarter-point increase by December.
Fed Rate Hike Outlook Supports the US Dollar Rising Treasury Yields Push the US Dollar Index Toward 100 Short term yield differentials are supporting the U.S. dollar as expectations of higher rates increase. The two-year Treasury yield rose following Warsh’s comments as this maturity is highly sensitive to Fed expectations. The U.S. dollar index also rose about 0.55% to 99.68. Strong capital inflows may be driven by higher expected returns on dollar assets and reduced incentives to buy lower-yielding currencies. The move in the two-year yield is therefore a cleaner signal for the dollar than a rise in long term yields.
The dollar still requires some support from the incoming data. The strong jobs report in August and sticky CPI inflation would increase the probability of a September hike and potentially push the US dollar index above the 100 handle. A weak payroll report would reduce the odds and could pull the index back toward the 98 area. The part of the hawkish Fed outlook is already reflected in the short term yields so the US dollar needs confirmation rather than another speech alone.
US Dollar Index Forecast Eyes 100.50 and 101.80 The monthly chart for the US dollar index shows that the index dropped toward the 98.50 support in August and rebounded strongly after the Jackson Hole meeting to close above the 10-month SMA. The 98.50 level was defined by the support of the ascending channel pattern that stretches from the April 2011 lows.
Payrolls could test whether Fed hike repricing sticks
September hike now deemed a coin-flip
US participation has gone eight months without rising
History suggests once Fed starts hiking, it rarely stops at one
USD/JPY breakout keeps buy-the-dip bias intact
USD/JPY was given a much-needed jolt last Friday, with Fed Chair Kevin Warsh doing enough to restore some of the Fed’s inflation-fighting credibility. That resulted in a sharp increase in pricing for a Fed rate hike this year, pushing USD/JPY to levels not seen since the latter parts of July.
While Warsh made it clear the Fed’s focus remains on the price stability side of its dual mandate, the week ahead will be all about maximum employment, with a raft of major US labour market data on the calendar, headlined by non-farm payrolls for August on Friday.
On the surface, that suggests this week may be something of a placeholder until we get further information on inflation. The counter-argument is that the data carry the potential to bring the maximum employment side of the mandate back to the attention of the Fed and markets, potentially challenging the hawkish repricing seen since Jackson Hole.
USD/JPY finally wakes up
Source: TradingView, FOREX.com
It’s been tough going for USD/JPY traders in August, with the volatility injected by record intervention from Japan’s Ministry of Finance and the US Treasury subsiding quickly, culminating in what has been an historically quiet period for the pair.
Before Warsh’s speech last Friday, five-day realised volatility had fallen to the 12th-lowest reading since 2000, while average daily candle bodies sat in the bottom 2.2% of rankings over the same period.
Thankfully, the Fed chairman finally woke the market from its slumber, sending USD/JPY sharply higher as markets rebuilt expectations for rate hikes this year.
Markets rebuild Fed hike bets
Warsh made it clear that it’s the price stability side of the dual mandate giving the FOMC the most heartache right now, while describing the labour market as stable. That really underlines where the committee’s concern currently sits. Inflation is too high and, if it doesn’t start to subside towards more acceptable levels in a timely manner, the Fed may have to act.
Based on the market reaction, that was enough to restore some of the Fed’s inflation-fighting credibility. Fed funds futures were pricing around 26 basis points of hikes by year-end before Warsh spoke. By the end of the session, that had increased to 34.5 basis points, with September now basically a 50-50 bet.
Source: TradingView, FOREX.com
We also saw a bear move across the US Treasury curve, but importantly it was a bear flattening, with the front end backing up much faster than the long end. That may disappoint the likes of Scott Bessent and Donald Trump, who would like to see that key long-term borrowing cost for the mortgage market lower, but from a market perspective it suggests some credibility was restored, at least for now.
Of course, the proof will be in the pudding if we ever get to the point where it becomes irrefutable the Fed should move and it still doesn’t. But we’re not at that point yet.
Employment mandate back in focus
Looking at the US calendar in the week ahead, while the Fed’s priority is on inflation, the data flow will be dominated by the labour market.
Source: TradingView, FOREX.com
Akin to a crescendo, what starts with releases such as JOLTS, ADP and jobless claims will eventually culminate in the key event, August non-farm payrolls on Friday. After the noticeable weakness seen in the July jobs report, it looms as the key test as to whether the US labour market is really as stable as Warsh suggested during his speech.
Payrolls are expected to increase by 45,000 after falling by 23,000 in July, while the unemployment rate is seen ticking up to 4.2% from 4.1%. But given what’s been happening with labour-force participation, the unemployment rate may be the more interesting part of the report.
Participation reversal risk?
Participation has now gone eight consecutive months without an increase, matching the longest such run in the series going back to 1948. Over that period, it has fallen from 62.5% in November to 61.4% in July. That decline has helped to drag the unemployment rate lower despite continued softness in hiring.
Source: LSEG, FOREX.com
Even though the decline in participation looks structural, after such a historically long run without an increase, the risk of a move counter to the prevailing trend is there. If participation does pop higher, that alone could be enough to see the forecast increase in unemployment delivered, or result in an even larger rise if those re-entering the labour force aren’t immediately hired.
Given markets have been preconditioned to react to the payrolls figure, that may initially grab most of the attention. But a combination of another soft payrolls report and rising unemployment would raise questions over whether the Fed should be paying greater attention to the maximum employment side of its dual mandate.
Of course, the opposite also applies. A blowout payrolls number accompanied by unemployment holding steady or even declining would reinforce the likelihood that the Fed begins tightening policy again. On that front, keep an eye on average hourly earnings given linkages to services inflation.
Will Waller reinforce Warsh?
Fed Governor Christopher Waller’s speech on Thursday is another event of note. He’s one of the more influential voices on the FOMC and has developed a reputation recently for generating volatility across markets.
Waller has sounded more hawkish of late, but has the recent run of softer economic data changed that view? Or does he fall back in line behind what Warsh was communicating last week? By the time he speaks, markets will already have JOLTS, ADP and jobless claims in hand, giving him plenty to go and chew over before payrolls.
The ISM manufacturing and services surveys will also be watched, particularly the prices paid and new orders components, but they’re unlikely to really move the dial when it comes to delivering volatility.
History argues against one-and-done
While, on the surface, the week may come across as something of a placeholder until we receive further information on inflation, the counter-argument is that the incoming data could go and reposition the FOMC’s compass when it comes to its dual mandate.
With markets now basically 50-50 on a September hike, the question isn’t only whether the Fed will resume tightening this year. Historically, when the Fed has started hiking after an extended pause following an easing cycle, it has rarely been a one-and-done move.
Looking back at comparable episodes since 1982, there have been seven occasions where the Fed resumed hiking after at least six months after delivering its last cut. In six of those seven instances, the first hike was followed by at least one more move.
That makes the incoming data flow important not only for determining whether the Fed hikes, but whether it could mark the start of a broader tightening cycle rather than a solitary mid-cycle adjustment.
It’s also relevant for USD/JPY traders, with a noticeable increase recently in the correlation between the pair and implied pricing for Fed rate hikes this year, based on shifts in the shape of the Fed funds curve.
This content was created by an affiliate of FOREX.com and represents the views and opinions of the author/speakers, not the views and opinions of FOREX.com, StoneX Group Inc., or its subsidiaries. The content has not been independently reviewed by FOREX.com.
Japan calendar remains secondary
Source: TradingView, FOREX.com
As has been the case for a while, the Japanese side of the equation remains secondary in nature, especially with few risk events on the calendar.
JGB auctions on Tuesday and Thursday are probably the most interesting given the pressure seen on the back end of the Japanese curve recently. Further weak outcomes would only reinforce the bearish trend we’ve seen in the yen.
Takata’s speech on Wednesday should also be on the radar. Having dissented at the BOJ’s July meeting in favour of a hike, he’s a known hawk. So unless he suddenly starts sounding dovish, it’s hard to see his comments meaningfully changing pricing for a September BOJ hike, which is already north of 80%.
USD/JPY breaks higher
Source: TradingView
USD/JPY had been crawling higher in what loosely resembled an ascending triangle, even though it wasn’t the cleanest structure. But in the wake of Warsh’s speech on Friday, we saw a breakout that took out the August 18 high of 159.78, while also reclaiming the 100-day simple moving average.
The latter is now the immediate focal point underneath where the pair trades, along with a support zone running from 159.78 down to 159.50, which capped the pair for several weeks during August. Below that, the 200-day moving average is the next major level to watch.
Overhead, the confluence of the former record high of 160.73 and the 50-day moving average around the same level is the one to watch. A break above the latter that sticks would increase the odds of a retest of the high set earlier this year, even with the threat of intervention, with only 162.84 standing out as a level of note in between.
The message from the oscillators is one of a gradual shift in momentum. RSI 14 has moved marginally above the neutral 50 level for the first time since late July, while MACD has staged a bullish crossover but remains negative.
The broader message is that the downside momentum that had been building in the wake of the intervention episode is now all but over, with upside pressure arguably starting to build. While the oscillators remain broadly neutral, the string of higher lows and higher highs since the intervention episode reinforces the view that USD/JPY remains a buy-on-dips play.
Key Points:Spot silver dropped 4.17% after Fed Chair Warsh revived September rate-hike risk and sent yields and the dollar higher.Silver lost more than gold Friday, showing that industrial-demand concerns added to the pressure from the rate trade.Fed funds futures raised September hike odds from 35.4% to 57.5%, changing the near-term silver outlook.
Silver
-4.04%
Silver ForecastGold
-3.04%
Gold ForecastSilver Took a Harder Hit Than Gold and the Industrial Side Made It Worse Spot silver dropped more than 4% Friday after Fed Chair Kevin Warsh told Jackson Hole the Fed is not done. The metal fell from $65.29 at the opening to $62.27 by late afternoon. Gold lost 3% on the same speech. Silver losing more than 4% tells you something beyond the rate trade is working against it.
The 50-day moving average is still a long way below and the 200-day is now overhead resistance.
On Friday, Spot Silver (XAGUSD) settled at $62.49, down $2.72 or 4.17%.
Daily Spot Silver (XAGUSD) Technical Analysis Daily Spot Silver (XAG/USD) Spot silver finished sharply lower on Friday after giving up early gains. Shortly after the opening, the market surged to $71.18, its highest level since June 17. The rally fell short of an intermediate 50% level at $72.08 and the elusive 200-day moving average at $72.37. Both levels are resistance.
The main range is $54.78 to $71.18. Its 50% level at $62.98 is the primary downside target. This is followed by a short-term main bottom at $62.56 and the 50-day moving average.
50% of the all-time high is $60.835. It is a major long-term support level.
The main trend is up, but momentum shifted to the downside on Friday with the formation of a potentially bearish closing price reversal top. This chart pattern typically leads to a 2 to 3 day correction.
The 2-Year Yield Jumped and the Dollar Followed Warsh Higher Daily US Government Bonds 2-Year Yield Warsh said the Fed will have work to do if policymakers are not confident underlying inflation is returning to target. He said financial conditions do not appear restrictive. No forward guidance. No list of triggers before September 16.
The 2-year yield surged more than 10 basis points to 4.35%, its highest since late July. The dollar index rose 0.56% to 99.688 and hit its best level since August 19, reclaiming the 200-day moving average at 99.160. Fed funds futures repriced September hike odds from 35.4% to 57.5% inside one session.
Silver was already struggling to hold above $64 before the speech. The yield move pushed the dollar through resistance and silver went with it. The metal dropped $3 from the session high to the session low in a few hours. The speed of the move says the long side was not positioned for Warsh to come in that hard.
Silver’s Industrial Exposure Compounds What the Rate Trade Started Daily Spot Gold (XAU/USD) Gold lost 3% on the same session. Silver lost more than 4%. The difference is industrial demand. Silver goes into solar panels, electronics, automotive components and industrial applications. Higher rates slow business spending. A hawkish Fed chair making September live again is not just a currency trade for silver. It reaches the manufacturing and construction side of demand at the same time.
The weekly loss for silver was 3.78%. Gold lost 1.58%. That spread widened Friday after narrowing earlier in the week when both metals rallied on the Treasury buyback announcement. The buyback trade lifted silver and gold together. The Warsh trade hit silver harder. The metal that rallied on financial demand gave back less. The metal that needs both financial and industrial demand gave back more.
India’s gold discounts widened this week as physical demand softened on speculation about an import duty rollback. Silver follows gold into the physical market in Asia. Weaker regional demand arriving on the same Friday as a hawkish Fed speech and a surging dollar removed support from underneath both metals at the same time.
What to Watch Silver enters the weekend with the worst weekly loss since mid-July and the rate trade working against both sides of its demand. The 2-year yield at 4.35% and September hike odds at 57.5% are the numbers that matter heading into the September 16 meeting. Employment and inflation data before that date carry more weight now than they did before Warsh spoke. The Treasury buyback rally gave silver a bid last week. Warsh took it back and added the industrial demand question on top of it.
Silver broke through its retracement zone at $63.96 to $62.87 on the session and found some support near the lower boundary. The 50-day moving average at $61.18 and the long-term 50% level at $60.835 are the next targets if selling continues. The 200-day moving average at $71.51 is now overhead resistance. The gap between the current price and the 200-day tells you how much ground buyers lost this week.
More Information in our Economic Calendar.
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James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.
The week in one sentence: speculative positioning shifted more constructively in the week to August 25. CAD short covering led the move, followed by a broad reduction in EUR shorts and renewed Gold buying. GBP and VIX positioning also improved, while JPY positioning deteriorated and WTI flows diverged from weaker prices.
The Canadian Dollar's (CAD) non-commercial net shorts shrank by over 36.5K contracts to about 121.5K contracts, marking the biggest weekly improvement since mid-December. In contrast, USD/CAD traded with respectable losses, with modest CAD rising as positioning improved. Furthermore, the net positioning increased to the 21st percentile.
EUR: Shorts retreat sharplySpeculative net shorts in the Euro (EUR) shrank by around 22.7K contracts to more than 36.3K contracts, the strongest weekly improvement since mid-April. EUR/USD advanced markedly, even surpassing the 1.1700 barrier for the first time since early May, confirming the more constructive flow, although net positioning remains near the 10th percentile of its five-year range.
JPY, AUD and commodities divergeSpeculators added nearly 10.4K contracts to their net short positioning of the Japanese Yen (JPY), even as JPY gathered extra pace and prompted USD/JPY to trade with modest losses. The Australian Dollar (AUD) net shorts widened by just 296 contracts, despite a solid performance from AUD/USD, which finally exceeded the 0.7100 barrier. WTI net longs increased by almost 1.4K contracts amid a decent drop in the price of the barrel. Coffee (KC1) speculative positioning increased marginally by 107 contracts alongside a humble price gain.
GBP and VIX: Confirmation strengthensNet positioning in the British Pound (GBP) improved by just over 10K contracts, while GBP/USD picked up strong upside traction well north of 1.3600 the figure. Speculators trimmed their VIX net shorts by roughly 11.3K contracts, mainly because the reduction of gross shorts more than offset the decline in gross longs; the aka “panic index” traded with a positive footing although meeting resistance around the 16.00 zone, indicating that price and positioning delivered a second confirmation signal.
Gold: Buying acceleratesGold net longs went up by more than 21.1K contracts to just over 243.3K contracts, the biggest weekly rise since June 2. The precious metal navigated with firm gains over the reporting week, confirming the stronger flow and lifting exposure to the 99th percentile of its five-year range.
Positioning Map: Gold reaches an extremeGold exposure sits near the 99th percentile, the clearest crowded long in the report. AUD exposure is also elevated near the 81st percentile. At the other end, EUR net positioning remains near the 10th percentile and WTI near the 13th, despite this week's modest increase in Oil longs.
USD/CAD has snapped a four-week losing streak, rebounding more than 1% from the August low after the recent decline stalled just above the yearly open. The broader yearly uptrend remains viable, but buyers still need to clear key resistance to strengthen the case that a more durable low is in place.
The price of Gold’s 3% Warsh-driven selloff has put Crédit Agricole’s $5,000 year-end forecast to a tougher test, but the bank’s debasement thesis remains intact. The Gold price in US Dollars (XAU/USD) ended Friday around $4,457 after Fed Chair Kevin Warsh’s Jackson Hole speech triggered the sharpest setback of the recent rally.
Gold fell 2.99% on Friday and is now almost $240 below August’s $4,696 high, although bullion still gained more than 10% over the month.
Warsh warned that the Fed still had “work to do” unless inflation moved convincingly towards 2%, sending September rate-hike expectations sharply higher and pushing the Dollar up. Gold subsequently suffered a heavy rate-driven selloff.
That move cuts directly across the near-term argument behind Crédit Agricole’s bullish call, but not necessarily the structural one.
The bank says gold has become “one of the key beneficiaries” of efforts by Washington to restrain long-dated Treasury yields, which worsened “the risk-reward trade-off for UST investors” and increased bullion’s appeal as a safe haven.
Crédit Agricole argues that these policy moves have “fanned US inflation fears and lowered US real yields”, strengthening gold’s role as a currency-debasement hedge.
It also sees geopolitics feeding the same trend, with the weaponisation of the Dollar through sanctions encouraging renewed reserve diversification.
“We remain long XAU/USD as a trade idea,” the bank says, adding that it continues to forecast gold at $5,000 by year-end with further gains in 2027.
Image: Gold price in US Dollars one-month chart The chart shows gold rallied from around $4,025 to nearly $4,700 before Friday’s collapse took it back towards its rising 20-day moving average.
We recently highlighted the return of ETF and futures buyers to gold, while BofA’s separate $5,000 forecast sits on a longer 2027 horizon.
Crédit Agricole’s call is more demanding.
From $4,457, a year-end move to $5,000 requires roughly 12% upside.
Warsh has made that path harder, but the bank’s forecast was always built on fiscal, Treasury and de-dollarisation risks as much as Fed easing.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The Silver price has fallen back to $66 after Warsh revived Fed hike bets, but UBS still sees XAG/USD reaching $80 by September 2027. The Silver price in US Dollars (XAG/USD) closed Friday at $66.42 after a 3.98% daily fall, giving back part of an August rally which had taken the metal above $71.
Silver nevertheless finished August more than 15% above its opening level.
UBS’s latest forecast path points to a recovery after the setback, with $70 in December 2026, $75 in March and June 2027, and $80 by September 2027.
That is a notable extension of the bank’s earlier silver profile.
UBS strategists Wayne Gordon and Dominic Schnider had previously warned that high prices were cutting photovoltaic, silverware and jewellery consumption, estimating those channels would reduce demand by around 50 million ounces.
“Consistent with the smaller deficit, we have trimmed our price outlook across all forecast horizons,” they said at the time.
“In our base case, we expect silver to trade broadly sideways.”
Even then, UBS stressed that gold provided “an important anchor for silver”, limiting the downside from softer industrial and investment demand.
The latest forecast now extends that constructive path further out, with $80 restored as the September 2027 destination.
Image: Silver price in US Dollars - one-month performance chart Friday’s price action showed why the journey is unlikely to be smooth.
Silver had reached $71.03 during August before Warsh’s hawkish Jackson Hole message lifted yields and triggered a simultaneous unwind in both gold and silver. Silver fell around 3.5% in the immediate market reaction.
That leaves spot roughly 20% below UBS’s $80 forecast.
The bank’s earlier technical work was already pointing towards a high-$70s/$80 zone, with our latest UBS silver coverage highlighting $75.93 and $80.22 as upside markers.
The fresh global forecast makes the distinction clearer: $80 is no longer merely a technical extension.
UBS now has it in the formal September 2027 forecast path.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The Pound-Dollar rate has fallen back to 1.3534 after Jackson Hole, but UBS still sees Sterling at 1.40 by December and 1.41 through much of 2027. The Pound to Dollar (GBP/USD) exchange rate ended Friday at 1.3534, down 0.46% after Kevin Warsh revived expectations for another Federal Reserve rate increase.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.3534 (-0.46%)
Euro to Dollar (EUR/USD): 1.158209 (-0.61%)
Dollar to Yen (USD/JPY): 160.10118 (+0.50%)
That leaves Cable well below its August high at 1.3675, but UBS has made no retreat from its bullish medium-term Sterling path.
Its updated forecast table reads: “GBP/USD: 1.40 Dec 2026, 1.41 Mar 2027, 1.41 Jun 2027, 1.41 Sep 2027.”
The rationale was set out more fully by UBS strategists Constantin Bolz and Dominic Schnider earlier this month.
“UK politics have shifted from a headwind to a potential tailwind,” they said, while “[Pound] Sterling remains relatively under-owned.”
That under-ownership matters if investors return after Friday's Dollar-driven correction.
UBS has also argued that “long-dollar positioning remains vulnerable to a reversal”, creating scope for “existing long-dollar positions [to] be unwound” if Fed expectations soften again.
Friday went the other way.
Warsh pushed the implied probability of a September Fed hike from around 35% before his speech to 57.5%, while Sterling suffered its first weekly decline against the Dollar in more than a month.
We previously examined UBS's increasingly positive Sterling view before the Jackson Hole reversal.
The forecast now has a cleaner test: holding around 1.35 would leave the 1.40 year-end scenario plausible, while renewed Fed tightening pressure would make the first hurdle, around 1.38, considerably harder to clear.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Goldman now expects an RBA hike to 4.60% in November after a broad July inflation surprise, adding fresh rate support to the Australian Dollar. The Australian Dollar to US Dollar (AUD/USD) exchange rate ended Friday at 0.7163, still 1.7% higher in August despite losing 0.45% after Warsh's Jackson Hole speech.
Latest — Exchange Rates:
Pound to Australian Dollar (GBP/AUD): 1.889531 (-0.01%)
Euro to Australian Dollar (EUR/AUD): 1.617018 (-0.15%)
Goldman Sachs has made a more important change underneath that price action.
“Australia's headline CPI increased 1.0%mom in July, with year-over-year growth easing 30bp to 3.5%yoy – above our and market expectations,” economists Andrew Boak, Will Maher and Oscar To said.
Underlying inflation was stronger as well.
“The ABS monthly trimmed mean measure increased by 0.5%mom in July,” while annual trimmed-mean inflation remained at 3.6%, “also above expectations”.
More troubling for the Reserve Bank was the breadth.
“Price pressures also broadened in July: market services inflation accelerated, and consumer durables… rose by more than we expected.”
Goldman consequently raised its third-quarter trimmed-mean forecast to 0.93% quarter-on-quarter and concluded that the surprise “takes further tightening from ‘quite possible’ to most probable”.
The policy call changed with it.
“We now expect the RBA to hike 25bp in November to 4.60%,” Goldman said, while stressing “a material risk of an earlier RBA rate hike in September.”
Reuters data show the inflation release initially drove AUD/USD to a 12-week high around 0.7183 and lifted the market-implied probability of a September move to 38% from 17%.
Friday's Dollar surge subsequently knocked AUD/USD lower, but it does not alter Goldman's domestic argument.
The next decisive releases are Australia's labour-market report and August CPI.
A second broad inflation surprise would make November increasingly difficult for the RBA to avoid and could revive the Australian Dollar's yield advantage.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The price of Gold, silver and Bitcoin all fell after Warsh pushed September Fed hike odds towards 60%, abruptly challenging August's debasement trade. One speech managed to hit three of August's hottest trades at once.
Gold prices fell 2.99% on Friday to $4,457, silver dropped 3.98% to $66.42 and Bitcoin lost 3.08% to finish below $78,000.
The catalyst was Kevin Warsh.
“Here is my standard: We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed,” the Fed Chair told Jackson Hole.
“Otherwise, we have work to do.”
Markets rapidly raised the probability of a September rate increase from roughly 35% before the speech to around 58-60%.
The reaction was particularly uncomfortable for the hard-asset story that had dominated the previous week.
Crédit Agricole had described gold as “one of the key beneficiaries from the USD sell-off triggered by the US Treasury's recent attempts to curb the rise of long-dated UST yields.”
The bank argued that “the policy announcements have threatened to flood the market with USD cash, fanned US inflation fears and lowered US real yields”, creating a powerful currency-debasement trade.
Until Friday, that was working.
“Private investors have been participating in the latest gold rally,” Crédit Agricole said, while “long market positioning in XAU is far from extreme.”
The bank consequently remained emphatic: “We remain long XAU/USD as a trade idea and continue to forecast gold to appreciate to USD5000 by the end of year.”
Warsh did not destroy that thesis.
He did remind markets of its other side.
Higher expected policy rates lift the opportunity cost of gold and silver, strengthen the Dollar and remove some of the liquidity assumptions supporting Bitcoin.
We have already examined what Friday means for the $5,000 gold forecast, while the latest Bitcoin bull case was built partly on financial repression and Treasury intervention.
The next question is simple.
If Warsh follows the rhetoric with a September hike, Friday may mark a genuine interruption to the debasement trade.
If inflation cools enough to stop the Fed acting, this could instead prove a violent reset inside the same broader gold, silver and Bitcoin trend.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
This content was created by an affiliate of FOREX.com and represents the views and opinions of the author/speakers, not the views and opinions of Forex.com, StoneX Group Inc., or its subsidiaries. The content has not been independently reviewed by FOREX.com.
Canada’s 3.3% Q2 rebound supports the Loonie, but Scotiabank sees USD/CAD wrestling with 1.39 as the broader Dollar regains momentum. The US Dollar to Canadian Dollar (USD/CAD) exchange rate ended Friday around 1.3903, extending its late-August rebound despite another strong batch of Canadian economic data.
USD/CAD has still fallen around 0.8% during August and almost 1.5% over the past month, but the pair has recovered sharply from the 1.3733 low reached on 22 August.
Scotiabank analysts had expected the Canadian economy to confirm a solid rebound after the weakness around the turn of the year.
“The Canadian economy appears to have rebounded firmly after the weak period around the turn of the year and Q2 growth seems to be tracking a little above 3%,” the bank said.
That call proved accurate.
Statistics Canada reported that real GDP expanded 0.8% quarter-on-quarter in Q2, equivalent to an annualised 3.3%, the fastest pace since 2023.
Exports rose 3.6%, household consumption gained 0.8% and business investment increased 2.3%, while June GDP also beat Scotiabank’s 0.2% expectation with a 0.3% increase.
The Canadian Dollar barely moved.
USD/CAD climbed towards 1.3908 instead as Kevin Warsh’s Jackson Hole comments drove the broader US Dollar higher and lifted expectations for a September Fed rate increase.
Image: USD to CAD rate 1-month chart Scotiabank Outlook: CAD Fundamentals Have Improved Scotiabank had already warned that good Canadian numbers were becoming less capable of surprising the FX market.
“Solid data is perhaps already priced in to the CAD to a degree, given that domestic data have generally outperformed expectations in recent weeks,” it said, although stronger GDP could “add modestly to CAD tailwinds in the short run.”
The bank’s fair-value work also suggested the USD/CAD exchange rate had little reason to move dramatically away from the high-1.38s.
“Spot continues to track our fair value estimate closely,” Scotiabank said, with its equilibrium estimate falling to 1.3865 before the GDP release.
Friday’s close at 1.3903 therefore leaves the pair only modestly above that estimate.
The more interesting question is whether the Dollar’s post-Warsh rally can overpower the improving Canadian backdrop.
A Reuters poll published Friday found all 35 economists surveyed expect the Bank of Canada to leave rates unchanged at 2.25% next week, with most also expecting no policy change for at least another year.
That removes the prospect of an immediate BoC catalyst, leaving US rates and the worsening Canada-US trade dispute unusually important for the cross.
USD/CAD Technical Forecast: 1.3900 Is Becoming a Useful Pivot Scotiabank’s technical assessment remains officially neutral, but there are bearish signals underneath.
“The USD is maintaining, just about, its push above the 200-day MA (1.3840),” the bank said, while warning that the previous soft close could be a “heads up” that the Dollar rebound was beginning to stall.
“Daily and weekly trend oscillators remain bearish,” with intraday momentum also looking soft.
The levels are relatively clean.
Scotiabank places minor resistance around 1.3895/1.3900, followed by firmer resistance in the mid-to-upper 1.39s.
Support stands at 1.3825/30, with a stronger floor around 1.3775/85.
Friday’s close just above 1.3900 means that first resistance zone is already under pressure.
That contrasts with our recent UBS USD/CAD forecast, where the bank saw scope for near-term support before an eventual decline towards 1.36 during 2027.
Scotiabank is more tactical here.
Canada’s economy is performing well enough to support the Loonie, and its fair-value model sits below spot, but USD/CAD needs to get back under 1.3840 before the technical picture starts looking convincingly bearish again.
For the immediate outlook, 1.3900 is the battleground, 1.3825 the first downside target and the upper 1.39s the level that would signal the Dollar rebound has more room to run.
The Euro-Dollar has dropped to 1.158 after Warsh revived Fed hike bets, but Rabobank still sees choppy trade giving way to 1.18 into spring. The Euro to Dollar (EUR/USD) exchange rate ended Friday at 1.1582 after Kevin Warsh’s Jackson Hole speech triggered the Dollar’s strongest daily advance in more than two months.
Latest — Exchange Rates:
Euro to Dollar (EUR/USD): 1.158209 (-0.61%)
Pound to Dollar (GBP/USD): 1.3534 (-0.46%)
Dollar to Yen (USD/JPY): 160.10118 (+0.50%)
The pair had spent most of the previous 48 hours between 1.1640 and 1.1660 before collapsing through 1.1600, leaving Friday’s close close to the bottom of the session range.
Rabobank still expects the broader picture to remain frustratingly two-sided rather than turn into a clean Dollar rally.
“We see scope for further choppy range trading in EUR/USD in the coming months with an upside bias likely lifting the currency pair to the 1.18 area into the spring.”
That forecast looks more interesting after Friday.
Warsh pushed the market-implied probability of a September Fed hike from around 35% to 57.5%, while EUR/USD fell roughly 0.6% to 1.1582.
Image: EUR to USD 48h chart Friday’s break lower interrupted what had been a surprisingly resilient August for the Euro, but Rabobank does not think the pair will be driven primarily by European developments from here.
“In view of the imbalance of uncertainties, we expect that price action in EUR/USD in the coming weeks will continue to be dominated by news pertaining to the USD rather than the EUR.”
The “Bessent Put” Complicates the Dollar Story Rabobank’s argument centres on an increasingly awkward relationship between the US Treasury and the Fed.
“Since the announcement last week that the US Treasury would at least double the size of its bond buyback operations, the market has been discussing the potential for a ‘Bessent put’ and how willing the US Treasury Secretary may be to stem a rise in long-term interest rates.”
The bank sees an obvious political incentive ahead of November’s mid-term elections, but also a cost.
“The market’s ability to signal concerns over fiscal policy, inflation and reflect a true balance between supply and demand could be dampened.”
“This has raised questions over the Treasury’s credibility, which have re-opened the debate about USD debasement.”
Lower long-term yields could also keep financial conditions looser than they otherwise would be, potentially leaving inflation higher for longer and increasing the prospect of tension between Treasury policy and the Fed.
That tension was visible even before Warsh spoke, with Reuters highlighting the contrast between Treasury efforts to push long yields down and the Fed Chair’s emphasis on maintaining inflation discipline.
Rabobank Trusts the ECB More Than the Fed The Eurozone hardly has an easy inflation outlook either.
Rabobank notes that headline inflation reached 3.2% earlier this year as the Iran-war energy shock fed into consumer prices, with the duration of the conflict still critical for the outlook.
Yet the bank sees one important difference.
“The market has a strong belief in the ECB’s inflation fighting credentials. The Fed’s credibility, by contrast, is still up for debate.”
Eurozone inflation expectations have remained relatively contained, while Rabobank expects another ECB hike in September after June’s increase.
The economy has also held up better than feared.
“Stronger than expected Eurozone Q2 GDP growth data and a decent round of August PMI numbers reflect an economy which has been resilient in the face of this year’s energy price shock.”
That resilience has not translated into aggressive Euro buying.
“The market has been reluctant to build long EUR positions against the backdrop of the Iran war in view of the Eurozone’s energy importer status and the headwinds to growth and inflation that this status implies.”
Hence Rabobank’s near-term conclusion is deliberately restrained.
“In the absence of an end to the war, we expect the EUR’s upside potential to remain contained and favour choppy range trading for EUR/USD around the 1.16 to 1.17 area in the months ahead.”
That 1.16 floor is already being tested after Warsh.
We noted in our previous Rabobank EUR/USD forecast that the bank had brought forward its 1.18 target as US debt-market concerns intensified.
Friday has not removed that forecast, but it has made the path rather less comfortable.
If Fed hike pricing continues to build, EUR/USD can spend more time below Rabobank’s preferred 1.16-1.17 zone.
If Treasury intervention again pulls long yields lower while confidence in US policy comes under pressure, the Dollar side of the equation could reverse quickly.
For Rabobank, that tug of war is the forecast: messy around 1.16-1.17 first, then a gradual move towards 1.18 into spring.
Euro Prices: This Week USDEURGBPJPYCADAUDNZDCHFUSD +0.82%+0.82%+0.70%+0.99%+0.12%+1.13%+1.01%EUR-0.81% 0.00%-0.11%+0.17%-0.69%+0.31%+0.19%GBP-0.81%0.00% -0.11%+0.17%-0.69%+0.32%+0.19%JPY-0.70%+0.11%+0.11% +0.29%-0.58%+0.43%+0.30%CAD-0.98%-0.17%-0.17%-0.29% -0.86%+0.14%+0.02%AUD-0.12%+0.70%+0.69%+0.58%+0.87% +1.01%+0.88%NZD-1.12%-0.31%-0.31%-0.43%-0.14%-1.00% -0.13%CHF-1.00%-0.19%-0.19%-0.30%-0.02%-0.88%+0.13% The FX heat map compares how Euro (EUR) has performed against a basket of major currencies over the past week. The largest move was against the US Dollar, where Euro recorded its sharpest decline. Data comparing prices today (29/08/2026 18:21 UTC) and daily close on 22/08/2026.
To read the table, choose the base currency from the left-hand column and then move across to the quote currency along the top row. For example, the GBP row and USD column shows the weekly percentage move in GBP/USD.
Silver price breaks above $70 ahead of Jackson Hole, with Fed policy set to test the breakout as long-term demand and tight supply support the bullish outlook.
Silver Technical Analysis
Silver has cleared the $70 barrier, pushing above both the 50-day and 200-day EMAs with $80 as the next major resistance level. Source: TradingView. The silver market has rallied a bit to break above the $70 level early on Friday, as we continue to see a lot of noisy behavior in general. But the biggest thing about Friday is going to be waiting to find out where the speech leads us from Kevin Warsh later at Jackson Hole. After all, monetary policy from the Federal Reserve will have a major influence at times for the metal markets, and with that, I think we have to be cognizant that there could be quite a bit of volatility later.
Nonetheless, we are sitting just above the $70 level. That’s an area that’s been a major barrier, and now that we are above there, that certainly has caught my attention. If we get some type of dovish behavior, then in theory, that should be good for silver. We’ll just have to see how it plays out. We’ve been waiting all week for this speech, as evident by the fact that we could not break much higher.
Jackson Hole Catalyst and Long-Term Fundamentals Overall, this is a market that should get some answers later in the day, and in fact, if we do get some type of certainty, you could see momentum pick up.
I do like silver longer term, as I do think that the overall electrification of the overall economy will continue to be a major driver of demand for silver. And of course, we also have to keep in mind that the silver supply really isn’t expanding rapidly to keep up with it. So, I do like this from a longer-term standpoint. A breakout would not be a huge surprise to me, but this speech could throw a lot of questions into the market for the short term at least.
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We continue to get a little bit of noisy economic data, but at the same time, we have to worry about the Middle East and energy inflation, so this will be an interesting one. Nonetheless, gold looks good, and I do like gold long term, but that doesn’t mean that it has to take off here.
Technical Levels and Policy Inflection To me, from a technical analysis standpoint, a clearance of the $4,800 level would be crucial to really get the upside going. We’ve recently had the so-called golden cross with the 50-day EMA breaking above the 200-day EMA, so that’s a good sign as well.
But a pullback to the $4,500 level is a very real possibility as well, especially if Warsh sounds more hawkish than people anticipate. We are at a major point of inflection, so this is a market worth watching late today.
What’s happening: In the hours before Fed Chair Warsh’s Jackson Hole keynote, Gold is sitting essentially flat while Silver (+2.01%, above 70) and Platinum (+2.64%) both push higher, compressing the gold-silver ratio further to 65.14. Gold has been the most crowded long across CFTC-tracked positioning in recent weeks, and it’s also the metal most directly tied to the debasement and Fed-independence trade this speech is meant to test. Why it matters: A market pausing specifically on gold while its sister metals keep moving, right before the event that matters most to gold’s own thesis, is a pattern worth flagging even without a confirmed explanation for it. Several readings are possible, but the most mundane one, that the gold-silver ratio has simply been compressing for days on unrelated catalysts, is also the most likely. The real test comes only after the speech lands.
Also today:
Currency markets stayed relatively muted ahead of the speech. Aussie is the strongest currency for the week so far, supported by increasing RBA hike speculation, while Dollar’s second-place standing looks more like a consolidative move than genuine strength. Loonie is the worst performer despite slightly higher than expected Canadian monthly GDP growth, with Kiwi second worst. These positions could still change after Warsh’s speech. Silver Breaks 70 While Gold Refuses to Follow Silver has taken clear leadership across precious metals just hours before Fed Chair Kevin Warsh’s Jackson Hole keynote, rising more than 2% and breaking back above 70. Platinum is also advancing strongly, up around 2.6%, while gold is essentially unchanged. That divergence has pushed gold-silver ratio down further to around 65.14, extending compression already visible over recent sessions.
Timing makes move worth watching. Gold has been among more crowded precious-metal longs in CFTC-tracked positioning and is also metal most directly associated with this year’s fiscal-credibility and Fed-independence trade. Warsh’s speech is therefore a much more obvious binary catalyst for gold than for silver or platinum. Yet gold is precisely metal sitting still into event, while its peers continue higher.
That does not make silver’s advance a signal about what Warsh is about to say. It does, however, make relative performance notable enough to separate from broader “precious metals are rising” narrative.
Today’s Precious Metals Snapshot Gold: essentially flat. Silver: +2.01%, above 70. Platinum: +2.64%. Gold-silver ratio: compressed further to 65.14. Crowded Gold May Be Taking Event-Risk Pause One possible explanation is simply positioning. Traders may be reluctant to add further exposure to gold immediately before speech capable of testing one of rally’s central narratives. If market is already heavily positioned for fiscal-credibility concerns, adding more gold before Warsh carries asymmetric event risk: a strong defense of Fed independence could hit that trade quickly, even without conventional hawkish rate guidance.
Silver and platinum face less direct exposure to that specific catalyst. That gives existing trends in both metals more room to continue while gold waits.
There is also possibility of relative-value rotation within broader hard-asset trade. If investors remain constructive on precious metals but regard gold as comparatively fully priced near term, incremental flows could shift toward silver and platinum instead. Falling gold-silver ratio would be consistent with that interpretation, though price action alone cannot establish whether actual portfolio rotation is occurring.
Silver and Platinum Have Their Own Stories Simplest explanation may still have nothing to do with Jackson Hole.
Silver’s rally has been supported by its own industrial-demand narrative, including expectations surrounding AI-related power infrastructure and electronics demand. Platinum, meanwhile, has separate support from persistent South African supply constraints. Those catalysts can operate independently of Dollar, Fed policy or Treasury credibility.
That matters because gold-silver ratio had already been compressing before Friday. Silver was not waiting for Warsh to begin outperforming. Today may therefore represent continuation of an established relative-value move that happens to coincide with one of gold’s biggest event risks.
More speculative interpretation—that traders are expressing an advance Warsh view through less crowded metals to avoid moving gold or Dollar directly—is possible, but there is no flow evidence to support it. Without that evidence, it should remain lowest-confidence explanation.
Gold After Warsh Will Provide Better Test More useful signal will come after speech.
If gold suddenly catches up sharply in either direction while silver and platinum become less exceptional, that would suggest pre-speech divergence was at least partly about gold-specific event positioning. A Warsh message emphasizing monetary independence and market discipline could hit gold disproportionately. A more ambiguous or Treasury-accommodative interpretation could instead allow gold to surge and close gap with silver.
If silver continues outperforming regardless of gold’s reaction, case for an independent relative-value and industrial-demand story becomes stronger.
In other words, Friday morning’s divergence is interesting because it creates a testable setup after Warsh, not because it tells us outcome beforehand.
FX Markets Are Mostly Waiting Currency markets are far quieter by comparison. AUD remains strongest currency for week, supported by sharp repricing of RBA expectations after hawkish minutes, sticky inflation and resilient household spending pushed more major banks toward another hike this year.
Dollar ranks second, but its strength has looked more consolidative than conviction-driven. Markets have been reducing exposure into Jackson Hole rather than materially rebuilding a bullish Dollar rates story.
CAD sits at bottom of weekly rankings despite slightly firmer-than-expected monthly Canadian GDP, with NZD second weakest. Those positions could change rapidly after Warsh, particularly if speech produces a broad Dollar move.
For now, silver is making clearest move into Jackson Hole. Question is whether it is telling us something about broader precious-metals positioning—or simply continuing a rally gold has temporarily chosen not to join.
Related Coverage Currency Deep Dive Read why CAD has stabilized after absorbing the initial US tariff shock, and why Canada’s GDP now tests BoC expectations before Warsh brings a separate Dollar credibility catalyst later in the session: CAD Survived the Tariff Shock. Can GDP and Warsh Push USD/CAD Back Below 1.3730?. Global Data Deep Dives See why Eurozone Economic Sentiment’s rise to 98.4 was led by services and an improving hiring outlook: Eurozone Economic Sentiment Beats Forecasts as Services and Hiring Outlook Strengthen. Read why Switzerland’s KOF Barometer jumping to 106.7 reflects broad-based strength in manufacturing and foreign demand: Swiss KOF Barometer Jumps to 106.7 as Manufacturing and Foreign Demand Strengthen. See why Tokyo Core-Core CPI reaching the BoJ’s 2% target strengthens the case for another hike as soon as September: Tokyo Core-Core CPI Hits 2% as September BoJ Hike Case Strengthens. Frequently Asked Questions Q: Why is gold flat while silver and platinum are rallying today? A: There’s no confirmed explanation yet. The most speculative readings include traders avoiding gold specifically because it’s the most crowded, most Warsh-exposed position while silver and platinum run on their own independent catalysts (AI-driven industrial demand for silver, a South African supply collapse for platinum), or a rotation within the same debasement thesis toward metals that look less fully priced than gold. But the more mundane explanation, that the gold-silver ratio has simply been compressing for days on unrelated catalysts, is also the most likely one.
Q: Does this divergence mean something is about to happen at Warsh’s speech? A: Not necessarily. The timing may be coincidental, a pre-existing relative-value trend between the metals that happens to be running through the same morning as the speech rather than being caused by anticipation of it. None of the three speculative readings offered are confirmable without actual positioning or flow data, which isn’t available in advance.
Q: What would confirm whether today’s divergence was really about gold being singled out? A: Only the market’s reaction after Warsh’s speech actually lands. If gold catches up sharply in either direction while silver and platinum’s moves prove more muted by comparison, that would retroactively support the reading that gold was being singled out ahead of its own catalyst. That’s a read available only after the fact, not a prediction that can be confirmed beforehand.
Key Takeaways Gold is flat while Silver and Platinum rally: Silver is up 2.01% and above 70, Platinum has gained 2.64%, compressing the gold-silver ratio to 65.14. Gold is the metal most exposed to Friday’s speech: It’s been the most CFTC-crowded long in recent weeks and the metal most directly tied to the debasement and Fed-independence trade Warsh’s remarks are meant to test. Three explanations are offered, and none are confirmable: Traders avoiding gold’s Warsh-exposed positioning, a rotation within the same debasement thesis, or quiet pre-positioning expressed through less-watched metals. The most likely explanation is also the most mundane: The gold-silver ratio has been compressing for days already, and silver and platinum both have well-established catalysts unrelated to Fed policy. The real test comes only after the speech: A sharp, comparatively larger move in gold versus silver and platinum would retroactively support the “gold singled out” reading. Currency markets stayed muted ahead of the speech: Aussie led the week on RBA hike speculation, Dollar’s second place looked consolidative rather than strong, and Loonie lagged despite a Canadian GDP beat.
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Gold remains inside a downtrend channel formation which is still giving the chance for another drop to test the support of 4525-50. As we see from the chart and as long as prices hold below 4620, a drop could hit the market before the advancing again.
After rising nearly 14% in a three-week rally and reaching its highest level since mid-May near $4,700, Gold (XAU/USD) corrected lower to end the week in negative territory. August employment data from the United States (US) could trigger a directional move next week, while the technical picture highlights that the bullish stance persists in the near term.
Gold loses its bullish momentum as US Dollar stabilizesGold started the week on a firm footing and gained about 1% on Monday as the US’ “economic D-Day” on Iran underwhelmed, helping geopolitical tensions ease. The US Treasury Department announced new sanctions on 60 individuals, entities and vessels as part of its expanded effort to put economic pressure on Iran, but stopped short of imposing hefty penalties. Treasury Secretary Scott Bessent warned that if other countries do not sever business ties with Iran, they are under the risk of being forced out of the Dollar-based financial system. Bessent, however, declined to say which specific countries would be targeted or what type of penalties would be imposed.
The precious metal continued to climb higher but lost its traction on Tuesday after coming in within a touching distance of $4,700. While the overall market conditions remained mostly unchanged, the USD stabilized ahead of key data releases and limited XAU/USD’s upside.
The US Bureau of Economic Analysis reported on Wednesday that the Personal Consumption Expenditures (PCE) Price Index and the core PCE Price Index, the Federal Reserve’s (Fed) preferred gauge of inflation, rose by 3.7% and 3.3%, respectively, on a yearly basis in July, with both readings matching June’s increase.
The lack of progress in PCE inflation in July helped the USD stay resilient against its peers midweek. In turn, Gold corrected lower and lost more than 1% on the day. Other data from the US showed that Durable Goods Orders rose by 1.1% in July, compared to the market expectation of 0.7%, while Personal Income expanded by 0.4%.
Strategists at Deutsche Bank note that these latest US economic releases amounted to “a solid slate of data that’s hard to square with a view that Fed policy is restrictive.” They note that, although “pricing of a September Fed hike was pretty stable (up from 36% to 37%), there was greater repricing of Fed expectations further out with 42bps of hikes now being priced by next June (+3.7bps on the day).”
Meanwhile, Cleveland Fed President Beth Hammack, one of the dissenters who favored a hike at the last Fed’s meeting, delivered a hawkish message on Thursday, with an 8/10 FXS Speechtracker score. The emphasis that the “most recent inflation number was as expected” but that “now is time to act given persistence of inflation,” alongside the view that current policy is not providing restriction and that the neutral rate is on the higher side, underscored a push for tighter policy to re-anchor expectations. Repeated worries about an emerging “inflationary mindset,” public confidence in a return to 2%, and cost-of-living concerns signalled a readiness to endorse further rate hikes or at least resist cuts, a configuration typically supportive of the US Dollar.
Ahead of Fed Chair Kevin Warsh’s speech at the Jackson Hole Symposium and the US Bureau of Labor Statistics’ preliminary benchmark revision to Nonfarm Payrolls (NFP) on Friday, Gold remained indecisive and closed virtually unchanged above $4,600 on Thursday.
Fed Chair Warsh delivered a distinctly hawkish-leaning message at the Jackson Hole on Friday, with an FXS Speechtracker score of 7.4/10, compared to the 6.5/10 historical average and underscoring a stronger-than-usual emphasis on the inflation mandate.
The insistence that the Fed must be “confident underlying inflation is moving to objective, or “we have work to do,” alongside comments that it is “hard-pressed” to call financial conditions restrictive and that recent disinflation has not “meaningfully changed” underlying trends, pointed to a bias against rapid easing even as growth, consumer spending, and business investment remain solid.
Overall, the tone reinforced a firm 2% PCE target and highlighted that resilient activity and loose credit conditions could keep the Fed cautious about cutting rates too soon. Gold turned south on Fed Chair Warsh’s comments and dropped to a fresh weekly low near $4,550.
Gold investors await critical US employment dataThe US economic calendar will feature the Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI) data for August on Tuesday. In case the headline PMI reading stays in the expansion territory above 50, and the input inflation component of the survey, the Prices Paid Index, comes in above July’s reading of 71.1, the USD could stay resilient against its rivals and cap XAU/USD’s upside. The ISM Services PMI report on Thursday could trigger a similar market reaction. Still, investors are likely to refrain from taking large positions ahead of Friday’s August employment report and limit the impact of PMI data on the yellow metal’s performance.
In July, Nonfarm Payrolls unexpectedly declined by 23K and missed the market expectation of 80K by a wide margin. As a result, investors scaled back bets for a Fed interest rate increase in September. However, the underlying details of the July employment report suggested that the labor market conditions were not as dire as it seemed initially because a majority of job losses were concentrated in government positions, especially in education due to seasonal variations in academic contracts and summer staffing shifts, and leisure and hospitality sector, which reflected the loss of jobs with the FIFA World Cup coming to an end.
A noticeable rebound in August, with an NFP print above 60K, could lead investors to second-guess a Fed policy hold in September and provide a boost to the USD heading into the weekend, causing XAU/USD to come under bearish pressure. Conversely, another disappointing NFP reading below 30K could point to a steady deterioration in labor market conditions. In this scenario, market participants could start pricing in a steady Fed policy for longer and open the door for a leg higher in XAU/USD.
According to the CME FedWatch Tool, markets are still pricing in about a 80% probability that the Fed will raise the policy rate by at least 25 basis points (bps) by the end of 2026.
Source: CME GroupMeanwhile, investors will continue to keep a close eye on the situation in the Middle East. Iran and Oman have reportedly reached an agreement to establish a temporary shipping lane in the Strait of Hormuz. Still, Iran insists that the US must lift its naval blockade and return to its commitments under the Memorandum of Understanding before the waterway is fully opened. At the same time, mediators Qatar and Pakistan continue to ramp up their efforts to convince the US and Iran to find a diplomatic solution. In case Crude Oil prices decline sharply in the short term with sides agreeing to engage in direct negotiations, Gold is likely to gather bullish momentum.
Rabobank’s Bas van Geffen argues that Tehran’s current strategy may prove self-defeating over time. He notes that “Iran using this leverage now, may hurt the country in the future,” as the threat of closing the Strait of Hormuz is already “forcing exporting neighbours and importing countries around the globe to rethink their supply lines.” As these alternatives are developed, Rabobank expects that “Iran’s ability to take the global economy hostage will wane.”
FXStreet Economic CalendarGold technical analysis: Latest decline appears as a technical correctionGold turned south after approaching $4,700 midweek. With this decline, the Relative Strength Index (RSI) indicator retreated below 70 but managed to hold above 60, pointing to a technical correction rather than a bearish reversal. Additionally, XAU/USD continues to hold slightly above the 200-day Simple Moving Average (SMA), reaffirming the bullish stance.
On the upside, $4,675-$4,700 (Fibonacci 50% retracement of the March-August downtrend, round level) aligns as the initial resistance area ahead of $4,850 (Fibonacci 61.8% retracement) and $5,000 (psychological level).
Looking south, a strong support region could be spotted at $4,530-$4,500, where the 200-day SMA and the Fibonacci 38.2% retracement align. If Gold drops below this area and fails to reclaim it, technical sellers could take action. In this case, $4,400-$4,375 (static level, 100-day SMA) and $4,300-$4,295 (static level, Fibonacci 23.6% retracement) could be seen as next support zones.
Gold daily chart Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Gold (XAU/USD) prices extend losses to over 2.50% on Friday as market participants digest hawkish comments from Federal Reserve (Fed) Chair Kevin Warsh at Jackson Hole. Rising US Treasury yields and overall US Dollar strength are the two drivers of the sudden weakness in precious metals. The XAU/USD pair trades at $4,473, after hitting a high of $4,629.
XAU/USD extends losses as Jackson Hole remarks revive Fed tightening risksWarsh commented that he still sees inflation as a priority, leaning hawkish as he recognized that underlying inflation measures haven’t improved. He stated that the Fed must be confident inflation is returning to its 2% goal, or otherwise “we have work to do.”
In his prepared remarks, he acknowledged that consumer spending is healthy and that the labor market is solid. Nevertheless, when speaking about price stability, Warsh acknowledged that the figures were “more concerning,” suggesting that the Fed would focus on tackling inflation.
Immediately after his remarks, money markets priced in a 50% chance of a 25-basis-point rate hike by the Fed at the September 16 meeting. As of writing, investors trimmed the odds to nearly 44%, but for December, they see an 82% chance, according to Prime Terminal.
The Greenback is rising by over 0.60%, as measured by the US Dollar Index (DXY), which tracks the value of the American currency against six other currencies. The DXY sits at 99.72, underpinned by the jump in US Treasury yields. The US 10-year Treasury yield has soared by 5.5 basis points to 4.728%.
The rise in US yields is attributed to market participants increasing their bets on a rate hike by the Fed at the September meeting. The odds stand at 43%, up from 34% a day ago, according to Prime Market terminal.
Other data showed the Nonfarm Payrolls Annual Revision coming in at -79K, below forecasts of 183K, improving from the previous revision of -911K. Also, the University of Michigan (UoM) Consumer Sentiment in August was 51.7, above estimates of 51, but deteriorated compared to July’s print.
US households expect inflation over the next year to ease from 4.2% to 4%, while over five years, expectations remain steady at 3.3%, in line with forecasts.
XAU/USD technical analysis: Gold’s tumbles below $4,500Gold’s price action showed that the yellow metal almost tested the 200-day Simple Moving Average (SMA) at $4,527. However, it reversed part of the move on Warsh’s remarks, pushing back above the psychological $4,550 area.
From a momentum standpoint, buyers remain in charge as the RSI is above its 50 level. Nevertheless, the index has recently been trending lower, an indication that, in the short term, sellers are stepping in.
XAU/USD falling below the 200-day SMA opened the door to a move below $4,500. The next area of interest would be the 100-day SMA at $4,374.
For buyers, the first resistance is $4,500. Once reclaimed, the next stop is the 200-day SMA at $4,527, followed by $4,600. A decisive breakout could open the door to challenge the August 27 daily high at $4,643 ahead of the elusive $4,700.
Gold daily chart(This story was corrected on August 28 at 18:38 to say Warsh instead of Warren in the technical analysis section.)
Fed FAQs Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
EURCHF currency pair recently reversed from the resistance zone between the pivotal resistance level 0.9400 (which has been reversing the price from September of 2025), 61.8% Fibonacci correction of the downtrend from March of 2025and the upper daily Bollinger Band.
The downward reversal from this resistance zone stopped the earlier minor impulse wave c of the ABC correction 2 from March.
EURCHF currency pair can be expected to fall further to the next support level 0.9300 – low of the previous correction iv.
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EURNZD currency pair recently reversed from the powerful support zone between the long-term support level 1.9540 (which has been reversing the price from February) the lower daily Bollinger Band.
The upward reversal from this support zone is likely to form the daily Japanese candlesticks reversal pattern Hammer if the price closes today near the current levels.
Given the strength of the nearby the long-term support level 1.9540. EURNZD currency pair can be expected to rise further to the next resistance level 1.9700.
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FxPro is an award-winning online broker offering Contracts for Difference (CFDs) on forex, futures, spot indices, shares, spot metals and spot energies. FxPro serves clients in over 150 countries worldwide and offers multilingual customer support 24/5. Trading CFDs involves significant risk of loss.
Silver (XAG/USD) price made a U-turn after reaching a two-month high of $71.12 on Friday, then dove below the $69.00 figure as Federal Reserve (Fed) Chair Kevin Warsh leaned hawkish in his Jackson Hole speech, pushing US Treasury yields higher. Consequently, the white metal edged lower, with XAG/USD trading at $66.76, down 3.60%, at the time of writing.
XAG/USD Price Forecast: Technical OutlookFrom a price action standpoint, Silver's false breakout above the $70.00 level could open the door to a deeper-than-expected pullback, even though XAG is short-term upward biased.
Momentum, as depicted in the Relative Strength Index (RSI), favors further upside as buyers are in control. However, over the last two days, the RSI dipped, indicating that bulls are not out of the woods.
For a bullish resumption, Silver must clear $70.00. A breach of the latter will expose the high of the day at $71.12, followed by the $72.00 milestone. Above sits the 200-day SMA at $72.48.
On the other hand, the path of least resistance in the near term is a break below $66.00, which could prompt a test of $65.00, followed by the 50-day SMA at $61.44. Once hurdled, the $60.00 psychological level is below.
XAG/USD Price Chart – Daily
Silver daily chart Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
The EUR/USD pair pulled back in the last full week of August, settling a handful of pips below the 1.1600 mark. The US Dollar (USD) was able to post a comeback after suffering steady losses throughout the month, exacerbated by the United States (US) Department of the Treasury announcement of increased long-bond buybacks on August 19. The recovery that followed the sell-off seems corrective as the pair holds far above the monthly low at 1.1350, yet closer to the peak at 1.1710.
The Middle East war was the main factor behind USD strength between March and July as the conflict pushed energy prices much higher, bringing mounting inflationary pressure back to the fore and, in turn, potentially tighter monetary policies around the globe.
Federal Reserve (Fed) Chair Kevin Warsh debuted as the Fed’s head, pledging to tame inflation. So far, his words have outpaced his actions. Despite inflation almost doubling the Fed’s goal, Warsh and co. kept interest rates on hold. It’s not actually a surprise if we consider that US President Donald Trump spent most of his latest mandate demanding lower interest rates from former Chair Jerome Powell.
Sentiment shift amid uncertaintyThe Middle East war continues, but the USD lost its crown as preferred safe-haven as investors dropped bets of higher interest rates in the US. At this point, it is unlikely the Fed will hike rates in September. What’s so terrible about the Fed holding rates? It’s not about the Fed holding rates steady but about almost all major economies having already pulled the trigger more than once. Most major central banks have already delivered rate hikes, and more than one, since the year started. The Fed’s hesitation is not related to macroeconomic data but to a potential clash with President Trump.
Fed Chair Kevin Warsh spoke at the Jackson Hole Symposium on Friday and said that they must be confident that underlying inflation is moving toward the objective, adding that they have work to do otherwise. The US Dollar found some near-term demand with his hawkish words as the odds for an interest rate hike in September increased from roughly 35% on Thursday to 45.7%, according to the CME FedWatch Tool.
Beyond the continued tensions that keep Oil prices elevated, market participants now have another source of concern. US President Donald Trump abruptly ended trade talks with Canada and imposed fresh levies on the country of around $20 billion. However, Canadian Prime Minister Mark Carney quickly responded by enacting retaliatory tariffs of the same amount.
Hawkish hopes may boost USD demand, but uncertainty is putting a cap on it.
No bad news is good newsUS data released throughout the week came in line with expectations, easing pressure on the Greenback. The market saw as good news the fact that the news was not as bad as feared. The US published the first revision of the Q2 Gross Domestic Product (GDP), which confirmed annualized growth at 1.5% in the three months to June, as previously estimated.
The Fed’s favorite inflation gauge, the Personal Consumption Expenditures (PCE) Price Index, remained unchanged at 3.7% YoY in July, although slightly above the expected 3.6%. The core PCE Price Index for the same period held steady at 3.3%, as anticipated. Finally on Friday, the country published the Nonfarm Payrolls annual revision of the twelve months to March 2026. The number of new jobs was revised downward by 79,000, or 0.1%.
The European macroeconomic calendar offered nothing relevant but will become more interesting in the coming days. Germany will publish the preliminary estimates of the August Harmonized Index of Consumer Prices (HICP) on Monday, while the EU will release the HICP on Tuesday. Annualized inflation, as measured by the HICP, is foreseen at 3.2% following the 2.9% posted in July, while the core annual HICP is expected to remain unchanged at 2.5%. Other than that, the EU will publish July Retail Sales while Germany will unveil July Factory Orders on Friday.
The US macroeconomic calendar will also be interesting. The country will publish the August ISM Services and Manufacturing Purchasing Managers Index (PMIs) and multiple employment figures, closing on Friday with the August Nonfarm Payrolls report that is expected to show the economy added 45,000 new job positions in the month after losing 23,000 in July.
EUR/USD Technical Outlook:
The daily chart shows EUR/USD is losing its positive tone, as the pair is struggling to hold the 1.1600 mark and is barely above the 20- and 100-day Simple Moving Averages (SMAs) at 1.1591 and 1.1573, and remains capped by the 200-day SMA at 1.1633. The Momentum indicator eases within positive levels and nears its midline from above, while the Relative Strength Index (RSI) indicator heads south almost vertically and now sits near 54, hinting at buying interest giving up.
In the weekly chart, EUR/USD retains a modest bullish bias as it remains above the 20-week SMA at 1.1571, with the longer-term 100- and 200-week SMAs at 1.1330 and 1.1067 reinforcing an underlying supportive structure. The RSI indicator sits near a neutral 51, while the slightly negative Momentum hints that upside traction continues to vanish.
On the downside, immediate support is seen at the 20-day SMA near 1.1591, with the 100-day SMA at 1.1573 reinforcing a broader demand zone on pullbacks. On the topside, the 200-day SMA at 1.1633 is the next key resistance, followed by recent tops in the 1.1710 level. Only a clear advance beyond the latter would revive the bullish trend and open the door for an extension towards 1.1800.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
EUR/USD is extending its pullback after the recent recovery stalled at a major resistance zone. The decline accelerated today on the heels of Fed Chair Warsh's remarks at the Jackson Hole World Economic Symposium with Euro now poised to mark the largest single-day loss since June.
Interest Rates and Key Support Levels The question now is going to be about interest rates. Interest rates, of course, rallied and rose after that speech, putting a little bit of pressure on the gold market.
I think we’re going to have to see how the weekend pans out, but it would not take much for the market to fall apart here for a little bit. A longer-term breakdown is a completely different story, though. It’s really not until we break down below $4,000 that we are now a negative trend.
Short-term pullback, maybe, and it does make a certain amount of sense that we shot towards a $700 gain almost immediately, and now we’re back about $180. So somewhere around the 50-week EMA, that’s about half the gains, that would be a normal pullback. We’ll have to see how traders read into this, but the Federal Reserve being more hawkish than thought, that does cause a bit of a problem for the gold market.
The Pound Sterling (GBP) tumbles versus the US Dollar (USD) on Friday as Federal Reserve (Fed) Chair Kevin Warsh put inflation as the priority at the Fed, increasing the likelihood of an interest rate hike next month. The GBP/USD trades at 1.3538, down 0.40%. Read More...
GBP/USD Price Forecast: Holds steady to near 1.3600, with bullish bias intact above 100-day SMAThe GBP/USD pair steadies around 1.3590 during the early European session on Friday. Traders pared expectations for an interest rate hike by the Bank of England (BoE) this year and shifted their attention to the annual symposium on monetary policy at Jackson Hole in the US later on Friday. Read More...
British Pound edges higher despite delaying BoE rate hike expectationsGBP/USD inches higher after two days of losses, trading around 1.3600 during the Asian hours on Friday. However, the British Pound (GBP) may encounter headwinds as recent declines in Brent crude oil prices ease immediate inflation concerns. This shift has led money markets to push back expectations for the Bank of England's (BoE) next interest rate hike from late 2026 into early 2027. Read More...
Key Points:Warsh reaffirmed his commitment to a 2% inflation target at Jackson Hole, triggering a short-term pullback in precious metals.Gold miners surged roughly 50% after bottoming mid-year, as forecasted, and prices were due for a 1 to 2-week pullback. Ideal support levels provided below.Our long-term outlook for gold remains unchanged: we expect the bull market to continue into 2030–2031. Gold miners are reinforcing our expectation for second-half outperformance and may offer substantial upside from current levels.
In this article:Gold
-3.65%
Gold ForecastSilver
-3.78%
Silver ForecastPlatinum
-0.99%
Gold Big Picture Here’s a quick reminder of where I believe we are in the larger bull trend: the 2026 pullback is only the halfway point of a 10-year rally that should take gold well above $10,000 by the end of the decade. Just like in 2006, I expect the recent lows to hold throughout the remainder of the bull market. In other words, I believe we just saw a major bottom.
US Dollar The dollar has been forming intermediate lows roughly every three to four months, and it appears we may have just formed another one on August 20th. Our work suggests that a major top was established in June, corresponding with the anticipated mid-year lows in precious metals.
The current rebound is expected to roll over in September. Prices would need to take out the 101.80 high to invalidate our outlook for renewed weakness extending into late 2027. We expect this prolonged period of dollar weakness to provide a significant tailwind for precious metals, ultimately fueling new all-time highs.
Gold Gold is experiencing its first meaningful pullback after bottoming mid-year, as forecasted. Look for prices to find support around the 50-day EMA during the opening week of September, with final support near $4,200 should the correction extend deeper.
Silver Silver bottomed mid-year as forecasted, and prices are struggling to regain the $70.00 level, which is not surprising. Look for initial support around the 50-day EMA at $64.65 during this pullback, with final support near $60.00 should the correction deepen.
Platinum Platinum is correcting following its initial surge from the mid-year low. Look for initial support around the 50-day EMA, with final support arriving near $1,700 should the correction deepen.
GDX to Gold Ratio Miners are breaking out relative to gold, supporting our view that they are positioned to outperform. We believe the sector could double relative to gold as it moves toward a more appropriate valuation.
GDX Miners have surged 50% from their July low, supporting our view that they will outperform gold during the second half of this bull market. Progressive closes below the price gap at $100 would confirm a pullback is underway, with ideal support arriving around $90.00.
GDXJ Progressive closes in gold juniors below the $129 price gap would confirm a mid-cycle pullback, with ideal support arriving around $118.
SILJ Silver juniors are forming a large outside reversal day, suggesting a short-term top may be in place. A pullback toward $28.00–$30.00 could offer an opportunity to add to positions, particularly for those who missed the mid-year low.
Bitcoin Bitcoin surged nearly 30% in the back half of August, supporting the potential for an end to the bear market that began last October. Most of the recent gains, however, were driven by a short squeeze, and in my view, it would take a sustained breakout above $85,000 to confirm that a bottom is in place.
Another possibility I’m considering is that this was simply a convincing fakeout designed to turn sentiment bullish before the final collapse into Q4. Historically, the four-year cycle does not bottom until we get closer to year-end. A low in early July would deviate from that pattern, which is why I continue to look for renewed weakness in September and October.
In Closing Metals and miners bottomed mid-year right on schedule, and this is just a brief 1 to 2-week pullback in a growing uptrend.
It will take time for gold to sustainably reclaim $5,000 and silver to move back above $100, but we expect both to make new all-time highs next year, with miners likely leading the way.
AG Thorson is a registered CMT and an expert in technical analysis. For more price predictions and daily market commentary, consider subscribing at www.GoldPredict.com.
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AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle that will begin to unravel in 2020.
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Spot gold daily chart shows larger trend structure. Source: TradingView Reclaim Near $4,529 Keeps $4,780 Target Alive The ability to reclaim the 200-day moving average after this pullback, currently near $4,529, would be a key sign of strengthening and could open the way for sustainable bullish momentum and a third leg higher off the bottom. Until then, gold may remain under pressure from sellers as it tests these support levels and works off momentum from Friday’s breakdown.
A measured move from the recent breakout of a bullish pennant pattern points to $4,780. That target is reinforced by the 50% retracement of the full decline from the January peak and a prior lower swing high from the previous downswing. The confluence of those levels increases its potential as an upside objective.
Because this is the first pullback following a significant breakout above both the downtrend line and the 200-day moving average, an eventual recovery is still anticipated. That outlook begins to change though, if support fails to hold near the 20-day moving average. Should that average give way, Friday’s loss of the 200-day moving average would look like more than a brief interruption in the larger advance.
US Dollar Talking Points:
The US Dollar broke out after the hawkish lean from Kevin Warsh at the Jackson Hole Economic Symposium.
This produced a pullback in EUR/USD and for those looking to fade the USD-strength, that setup could be of interest.
USD/JPY is heading into the weekly close above the 160.00 handle and this begs the question as to whether we’ll see a response from either the BoJ and/or the US Treasury Department next week.
Of late, the US Dollar has been heavily driven by dynamics in USD/JPY and the Friday breakout illustrates that well, with both DXY and USD/JPY pushing up to fresh August highs on the back of Kevin Warsh’s speech at Jackson Hole.
US Dollar Four-Hour Chart
Chart prepared by James Stanley; data derived from Tradingview
USD/JPY
While 160.00 wasn’t a specific line in the sand set by policymakers, it was thought to be an important level that could possibly produce a response. Given the backdrop on Friday, with Kevin Warsh’s hawkish take at Jackson Hole driving a move of USD-strength, bulls finally mustered the motivation to test above the big figure despite posturing just below it for the prior two-and-a-half weeks.
As I had said in the Tuesday webinar, the pair was exhibiting continued higher-lows and that showed how buyers were continuing to respond to dips or pullbacks, and until there was a break in the fundamental backdrop, or a larger response from policymakers, that pace was likely to continue.
Friday marks a big test in that sequence as it’s the first push above the 160.00 level since the dual intervention. And like we’ve seen in prior episodes, now that bulls have broken through the seal the big question is for how long might they go until there is a response. The levels that I’ve been tracking are 160.64 and then 161.95, and above that is the same 164.00 that stalled the move ahead of the July FOMC and BoJ rate decisions and that’s what actually elicited a response.
USD/JPY Daily Chart
Chart prepared by James Stanley; data derived from Tradingview
EUR/USD
The move in EUR/USD has so far remained clean, with the 1.1576 support level holding the lows into the end of the week. This was resistance earlier in August before a breakout pushed a test of the 1.1700 handle, and for traders looking for USD-weakness that does not involve the hope of policy intervention, this could make for a compelling setup provided that support can hold through next week’s open.
EUR/USD Daily Price Chart
Chart prepared by James Stanley; data derived from Tradingview
--- written by James Stanley, Senior Market Analyst, Global Macro
The relative calm in the energy and bond markets have allowed the US dollar and equities to make a slightly positive start to the week. America's economic war on Iran also failed to trigger any panic, leaving investors with little to chew over until the release of US inflation data on Wednesday and Kevin Warsh's speech at the Jackson Hole Symposium on Friday.
Gold price (XAU/USD) is down 0.4% to near $4,630 during the European trading session on Tuesday. The precious metal corrects after failing to extend the rally above $4,700 earlier in the day.
The yellow metal struggles to attract bids even as a sharp decline in oil prices has weighed heavily on United States (US) Treasury Yields.
At press time, WTI Oil prices are down 3% to near $82.00. Lower prices diminish fears of high inflation expectations, a scenario that eases interest rate hike risks from global central banks and weighs on US Treasury Yields.
As of writing, 10-year yields on US bonds are down 0.6% to near 4.67%. 30-year US Treasury Yields trade 0.55% lower to near 5.2%.
The scenario of lower yields on US interest-bearing assets improves the appeal of non-yielding assets, such as Gold.
Going forward, investors will focus on the US Personal Consumption Expenditures (PCE) inflation data for July and the outcome of the Jackson Hole Symposium.
Gold Technical Analysis
In the daily chart, XAU/USD trades at $4,637.77, keeping a bullish near-term tone as it holds above the 20-day exponential moving average (EMA) at roughly $4,387.61 and above key Fibonacci retracement supports. The Relative Strength Index (RSI) stands around 70.8, placing the metal in overbought territory and hinting that upside momentum remains strong but increasingly vulnerable to consolidation or a corrective pause.
On the topside, immediate resistance emerges at the 50% Fibonacci retracement at about $4,779.97, followed by the 61.8% retracement near $4,972.47, with higher barriers seen at $5,246.55 and $5,595.68. On the downside, initial support is aligned with the 38.2% retracement around $4,587.46, ahead of the 23.6% level at $4,349.27 and the 20-day EMA near $4,387.61, where a deeper pullback could look to stabilize while the broader bullish structure remains intact above these levels.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
In our last video, we looked at how a desperate move by the US Treasury to buy more long-dated US bonds hurt USD.
Let’s take a look at the aftermath.
In today’s Market Outlook, let’s take a look at Forex trading on NVIDIA, Gold, XAU/USD, USD/CAD, CAD/CHF, AUD/NZD, and AUD/USD.
We have been following several USD pairs and buying the dip on pairs like AUDUSD when price reaches the lower trend line.
This trend line might be changing now, as global economies are losing confidence in USD.
For example, we often use the stochastic oscillator to signal reversals, with the trend, and we can use ADX to confirm.
When we see the red DI- line quickly turn down, it usually means that the short-term retracement has exhausted itself.
You may have seen our videos on using these indicators to spot price reversals after news events in our News Catalyst Fade, and we may get a chance tomorrow with Australian CPI.
In general, if yearly CPI comes in lower than 3.3%, this may signal to the RBA that they may not have to raise interest rates this year, which will drive AUD lower, against the trend.
Also, we have US PCE and GDP tomorrow so we will probably see good volatility on AUDUSD, but please check other USD and AUD pairs.
For example, we are in a ranging market looking at the AUD/NZD 4-hour chart, and our technicals helped us pick the reversals.
However, the daily chart tells a bit of a different story with AUD looking weaker, contrary to other pairs.
You will note, as well, that all CHF pairs moved last week on news that the SNB will not rule out negative interest rates.
This caused rapid CHF weakness, and the announcement of the US Treasury Bond fiasco caused a reversal, which our indicators spotted nicely.
You will also note a weekend gap on CAD pairs based on the surprise, very unreasonable demands by US trade negotiators over the weekend.
USDCAD saw the same effect and, normally, we would expect a continuation of the downtrend and a gap trade.
However, this is now a fundamental trade, not a technical trade, and the market will be waiting on better news from US/Canada trade talks before we see a stronger Loony.
We see a pullback on Gold.
This is likely just profit-taking, but keep an eye on tomorrow’s US PCE and GDP figures, as many analysts feel that gold is still bullish.
And, if you like to trade US equities, we have NVIDIA earnings tomorrow as well, whose share price has been falling for more than one week.
The USD/INR will trade as an interplay between the US Treasury's bond buyback program and the geopolitical scenarios. Current Setup and Live Chart With the US Dollar entering the week with negative sentiment, USD/INR’s upside may be capped or limited. This is because the rupee has significant exposure to the current geopolitical environment in the Middle East. This factor poses a substantial upside risk for the rupee.
USD/INR is mildly bearish at the moment. But significant oil-related upside risk means the pair’s direction could be driven more by the rupee’s response to oil prices than by the USD’s response to the local fiscal environment.
Last week brought news of the US Treasury’s intention to double its bond buyback program. Under this arrangement, the US Treasury will double the maximum limit of its 10–30-year liquidity-support buybacks from $2 billion to $4 billion per operation, with commencement set for 9 September 2026. The announcement caused a drop in US long-term yields and weakened the dollar’s yield advantage. But any geopolitical escalation puts the rupee on the back foot, meaning the pair could resume the upside even if the greenback is broadly weak.
USD/INR Forecasts: Key Scenarios This Week The scenarios that will determine the USD/INR forecasts are straightforward:
US Dollar ↓ + oil stable → USD/INR ↓ (mildly bearish) Dollar ↓ + oil ↑ sharply → USD/INR could still rise. Dollar ↑ + oil ↑ → strongly bullish for USD/INR. There are asymmetric risks to the USD/INR pair. In other words, any fresh escalation of the US-Iran conflict, particularly regarding the Strait of Hormuz, will quickly override any weakness from the US Treasury buyback intervention.
Macro Drivers for the USD/INR right now 1) The Treasury Buyback Program
The US Treasury’s long-end buybacks are set to increase to at least $4 billion per operation and will cover 10–30-year securities. This has reduced the USD’s yield advantage.
Although this move aims to improve liquidity and reduce pressure on the long end of the U.S. Treasury curve, it could reduce the appeal of USD-denominated assets. This impact is already being felt across several emerging market FX pairs.
2) Oil prices
Elevated oil prices remain the rupee’s biggest threat. India is the world’s third-largest economy, and elevated oil prices hurt the rupee. India’s structural dependence on imported crude means higher prices risk importing inflation into India and keeping import bills high. The accompanying deterioration in the trade balance puts pressure on the local currency. Indeed, persistently high oil prices could weaken the rupee enough to offset any losses the USD suffers from Treasury intervention.
3) Geopolitical risk
The conflict around Iran and the Strait of Hormuz creates three channels of pressure. The first is from higher crude prices, which raise import costs. The second is from higher freight and insurance costs incurred from using longer alternative oil shipping routes. The third is the exit of portfolio funds from emerging markets due to risk aversion. India’s current growth provides some buffer, but it does not reduce the risk premium that hits the rupee amid geopolitical escalation. risk
4) The RBI as a Manager of Rupee Volatility
The Reserve Bank of India (RBI) typically steps in to manage excessive rupee volatility. One way it does this is by deploying some of its external reserves to defend the rupee and prevent a disorderly, outsized depreciation.
USD/INR Price Catalysts 1) Brent crude direction: For the rupee, this is the most important variable right now. Lower Brent crude prices reduce India’s import bill and favor a USD/INR downside. A sharp rise in Brent crude raises import costs and supports the pair. As prices approach $100, this factor becomes more important.
2) US Treasury Yields: The bond buyback program is basically an intervention that determines the yields on long-term US borrowing costs. They were introduced to stabilize the bond market at the long end. If US Treasury yields decline as a result, the US Dollar also declines, and this supports the rupee. Ultimately, this is meant to cap the upside in the USD/INR. The reverse is also the case. If the program fails to curtail the rise in bond yields, we would see the USD regaining lost ground. Rising oil prices are bullish for the USD/INR.
3) Foreign portfolio flows: A decline in US bond yields and a weaker dollar improve the appeal of emerging-market FX such as the rupee. It would favor an influx of foreign portfolio funds into the Indian market. These funds need to convert into the local currency to participate in the Indian market; this is bullish for the rupee. Conversely, a global risk-off episode (such as a geopolitical escalation) could send these portfolio funds fleeing to safety and out of the Indian markets. This is a rupee-negative scenario.
USD/INR Technical Outlook The ascending trendline support is under threat, as the daily candle has violated it. We need to see the 95.24 support level (30 March high) break down for a push lower toward the 94.04 support and the 61.8% Fibonacci retracement of the 8 April – 20 May upswing. Below this level, additional support is seen at 93.25.
Fig 1: USD/INR daily chart showing key price levels (snapshot: 25 August 2026) Conversely, recovery above the trendline maintains its integrity. The bulls would need to force a bounce from there to aim for the 96.99 resistance as the next upside target. However, there is a potential for a pitstop at the most recent high seen on 24 July at 96.67. Only if this point is surpassed can we see a reclaim of 96.99.
GBP/USD is holding at 1.3627 on Tuesday. In the final full week of August, the pair remains near its highest level since mid-February. Sterling is being supported by dollar weakness following the US Treasury’s unexpected decision to at least double its purchases of long-term government bonds.
Investors are also awaiting details of new sanctions against Iran. The highlight of the week will be Fed Chair Kevin Warsh’s speech at Jackson Hole on Friday, which could shape expectations for the future trajectory of US interest rates.
In the UK, money markets continue to price in one Bank of England rate hike before year-end and a further 25-basis-point move by early 2027. July inflation accelerated to 2.9% – the highest since March – while core inflation came in above expectations at 2.6%.
Further support for the pound is coming from strong domestic data: PMIs point to a pick-up in business activity, while consumer confidence climbed to a two-year high in August. At the same time, high inflation remains the key risk, potentially fuelled by a protracted conflict with Iran and elevated energy prices.
Technical analysis
On the H4 GBP/USD chart, the market has nearly reached the local upside target at 1.3672 and is forming a narrow consolidation range below this level, currently extending between 1.3619 and 1.3650. A new compact consolidation range is expected to form below 1.3672. A downside breakout would open the way for a move lower towards 1.3550. The MACD indicator supports this scenario, with its signal line above zero and beginning to turn downwards.
On the H1 chart, the market has formed a compact consolidation range around the 1.3640 level, currently extending between 1.3618 and 1.3650. A move lower towards 1.3600 is expected, and a break below this level would open the way for a further decline to 1.3550. The Stochastic oscillator confirms this scenario, with its signal line below 50 and trending downward towards 20, indicating short-term downside pressure.
ConclusionGBP/USD remains near multi-month highs, supported by dollar weakness following the US Treasury’s bond buyback announcement and strong UK economic data. Markets are now focused on upcoming catalysts, including details of new sanctions against Iran and Fed Chair Warsh’s Jackson Hole speech on Friday, which could shape expectations for US interest rates. In the UK, money markets continue to price in further BoE tightening, supported by accelerating inflation and improving business activity and consumer confidence data. However, high inflation and geopolitical risks remain key concerns. Technically, the pair may see a short-term pullback towards 1.3600, with a break below this level opening the way towards 1.3550. The near-term direction will depend on central bank signals and geopolitical developments.
Silver (XAG/USD) continues its struggle to make it through the $70.00 psychological mark and turns lower for the second straight day on Tuesday. The white metal slides to the mid-$67.00s during the first half of the European session, though the technical setup warrants caution before positioning for an extension of the retracement slide from a two-month high, touched last Friday.
The XAG/USD maintains a bullish near-term bias following last week's breakout above the $66.55-$66.60 horizontal resistance. Moreover, the white metal holds well above the 200-period Simple Moving Average (SMA) on the 4-hour chart, suggesting that the broader uptrend is still intact. Meanwhile, the Relative Strength Index (RSI) is easing back toward the neutral 50 area and the Moving Average Convergence Divergence (MACD) is slipping into negative territory, hinting at waning upside pressure rather than a completed reversal.
On the downside, immediate support aligns with the $67.00 mark ahead of the $66.60-$66.55 resistance breakpoint, where buyers have recently attempted to stabilize the pullback. A deeper slide would expose the 200-period SMA at $61.30 as the next relevant technical floor, where the broader bullish structure would likely be reassessed if broken decisively.
On the top side, bulls might await sustained strength and acceptance above the $70.00 mark before positioning for any further gains towards the $71.00 round figure and the $71.55 hurdle. A sustained move beyond should pave the way for additional gains beyond the $72.00 mark, towards the $72.55 intermediate resistance en route to $73.00 and the $73.40 region.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
XAG/USD 4-hour chart
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Silver prices (XAG/USD) fell on Tuesday, according to FXStreet data. Silver trades at $67.82 per troy ounce, down 0.97% from the $68.48 it cost on Monday.
Silver prices have decreased by 4.59% since the beginning of the year.
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 68.23 on Tuesday, up from 67.93 on Monday.
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
GBP/USD is holding at 1.3627 on Tuesday. In the final full week of August, the pair remains near its highest level since mid-February. Sterling is being supported by dollar weakness following the US Treasury’s unexpected decision to at least double its purchases of long-term government bonds.
Investors are also awaiting details of new sanctions against Iran. The highlight of the week will be Fed Chair Kevin Warsh’s speech at Jackson Hole on Friday, which could shape expectations for the future trajectory of US interest rates.
In the UK, money markets continue to price in one Bank of England rate hike before year-end and a further 25-basis-point move by early 2027. July inflation accelerated to 2.9% – the highest since March – while core inflation came in above expectations at 2.6%.
Further support for the pound is coming from strong domestic data: PMIs point to a pick-up in business activity, while consumer confidence climbed to a two-year high in August. At the same time, high inflation remains the key risk, potentially fuelled by a protracted conflict with Iran and elevated energy prices.
Technical Analysis
On the H4 GBP/USD chart, the market has nearly reached the local upside target at 1.3672 and is forming a narrow consolidation range below this level, currently extending between 1.3619 and 1.3650. A new compact consolidation range is expected to form below 1.3672. A downside breakout would open the way for a move lower towards 1.3550. The MACD indicator supports this scenario, with its signal line above zero and beginning to turn downwards.
On the H1 chart, the market has formed a compact consolidation range around the 1.3640 level, currently extending between 1.3618 and 1.3650. A move lower towards 1.3600 is expected, and a break below this level would open the way for a further decline to 1.3550. The Stochastic oscillator confirms this scenario, with its signal line below 50 and trending downward towards 20, indicating short-term downside pressure.
Conclusion GBP/USD remains near multi-month highs, supported by dollar weakness following the US Treasury’s bond buyback announcement and strong UK economic data. Markets are now focused on upcoming catalysts, including details of new sanctions against Iran and Fed Chair Warsh’s Jackson Hole speech on Friday, which could shape expectations for US interest rates. In the UK, money markets continue to price in further BoE tightening, supported by accelerating inflation and improving business activity and consumer confidence data. However, high inflation and geopolitical risks remain key concerns. Technically, the pair may see a short-term pullback towards 1.3600, with a break below this level opening the way towards 1.3550. The near-term direction will depend on central bank signals and geopolitical developments.
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United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann describe GBP/USD price action as range-bound intraday between 1.3615 and 1.3660, with momentum indicators neutral. However, their 1–3 week view remains positive after turning bullish last week, looking for a move toward 1.3700 while keeping strong support at 1.3585. A break below that level would negate the upside scenario.
Range-bound now but bullish bias"24-HOUR VIEW: After GBP closed little changed at 1.3644 (+0.09%) last Friday, we highlighted yesterday that “the price movements still appear to be part of a range-trading phase.” We expected GBP “to trade between 1.3620 and 1.3665.” Our view was not wrong, as GBP traded between 1.3621 and 1.3656 before closing at 1.3630 (-0.10%). There has been no shift in either downward or upward momentum, and GBP is likely to continue to trade in a range, probably between 1.3615 and 1.3660."
"1-3 WEEKS VIEW: We turned positive on GBP last Monday (17 Aug, spot at 1.3540). On Friday (21 Aug, spot at 1.3640), we indicated that GBP “could continue to rise to 1.3700.” There is no change in our view. On the downside, if GBP breaks below 1.3585 (no change in ‘strong support level), it will mean that 1.3700 is out of reach."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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Gold – Chart Despite pulling back to the upper boundary of a rising channel $4,633, gold is holding above the 50-EMA at $4,569 and the 100-EMA at $4,493 on the 2-hour chart. This shows that the correction does not threaten the overall bullish structure. Bears have been unable to push price below $4,619 and $4,567 thus far. This further supports the bullish structure. A rejection at the level of $4,696 signifies that the bears have returned, but this is likely to be a short-term setback as buyers defend the higher-low structure.
The RSI, currently sitting at 55, reflects that price momentum has shifted from being overbought and is now in a neutral range. Price may trade around support at $4,619 and below, at $4,567, $4,508 and $4,448. If previous support is broken price may continue to fall. Resistance levels may be found at $4,696 and above at $4,756, $4,812.
According to my analysis, there is a bullish trend as long as gold holds $4,619. A break above $4,696 may be followed by further buying up to the levels of $4,756 to $4,812. Conversely, if price breaks below $4,567, a deeper consolidation may happen around $4,508.
Dollar Index Price Chart – Source: Tradingview Currently, the U.S. Dollar Index is at $99.02, up slightly from $98.55 on the 2-hour chart. While the rebound gives some short-term momentum to the DXY, it still sits below both the 100-EMA at $99.22 and the 50-EMA at $99.02, with an overall downtrend remaining intact. Until this changes, the structure will continue to be bearish.
RSI also shows the short term rebound and is currently at 55, which shows a recovery from oversold conditions and a move back above the neutral 50 level. There is resistance at $99.13 and $99.27, and even further at $99.38 and $99.71. If buying pressure pushes the price above these, $100.03 and $100.42 will be the next targets. In the event downward pressure remains at $98.99, $98.82, and $98.55, there is still downside.
In my opinion, the DXY is still under pressure unless a break of the $99.38 level is made. A break of this resistance zone could be the catalyst to push to $98.82, $98.55. In the event an upward break is made from the $99.13 – $99.38 resistance zone, it would be very bullish.
GBP/USD Technical Analysis: Pound Consolidates Above $1.3618 With $1.3656 Resistance in Focus
The British Pound (GBP) trades marginally higher against the US Dollar (USD) at around 1.3640 during the European trading session on Tuesday, even as the US Dollar Index (DXY) edges up, indicating strength in the British currency.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades slightly higher to near 99.10.
The Pound Sterling gains despite market experts seeing the Bank of England (BoE) holding interest rates steady in the near term.
UK inflation surprise limited as BoE pricing eases
Analysts at Danske Bank note that UK inflation data for July were broadly in line with expectations, with headline CPI rising to "2.9% y/y (cons: 2.9%, prior: 2.6%), mainly driven by the 13% increase in the Ofgem energy price cap from 1 July." They highlight that "core inflation was slightly higher than expected at 2.6% y/y (cons: 2.5%, prior: 2.6%)," while "services eased in line with expectations to 3.4% y/y (cons: 3.4%, prior: 3.6%)." According to Danske, the combination of this inflation print and "yesterday's weak labour market data" has "taken the top off BoE pricing for the remainder of the year."
Meanwhile, the US Dollar trades higher against its other peers as investors fear that fresh United States (US) sanctions on Iran could lift oil prices higher and eventually US Treasury Yields.
GBP/USD Technical Analysis
GBP/USD trades at 1.3640, maintaining a bullish near-term bias, with price holding above the 20-day Exponential Moving Average (EMA) at 1.3531, which reinforces an underlying supportive structure after the recent advance.
The Relative Strength Index (14) near 69 suggests strong upside momentum, though it is flirting with overbought territory, hinting that gains could become more gradual if buyers pause ahead of fresh catalysts.
On the downside, immediate support is seen at the 20-day EMA around 1.3530, where a break would expose a deeper correction toward prior lows not visible in the current indicator set. As long as GBP/USD remains above this moving average, the broader constructive tone is likely to persist, with any shallow pullbacks viewed as corrective within the ongoing uptrend.
Strategists at Scotiabank describe the current technical backdrop for GBP/USD as "solidly bullish," noting that after a period of range trading and "two tests of 1.3150 (April and June)," the pair now appears better poised to advance. They argue that "a sustained push above 1.3650/60 implies potential for an extension towards the 1.41 zone over the balance of the year," underscoring their view that the underlying trend dynamics continue to favour further Pound appreciation.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling FAQs The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
