Gold Faces Pressure as Fed Signals September Rate Hike

Gold analyst Ari Rut Murachai, head of analysis at GCAP Gold, says gold prices remain under pressure from Federal Reserve monetary policy after Chair Kevin Warsh signaled at Jackson Hole that the Fed still has "work to do" if core inflation does not clearly return to the 2% target. This pushed market expectations for a September rate hike to approximately 60% from 35% before the speech, strengthening U.S. Treasury bond yields and the dollar—both near-term headwinds for gold.

However, the Fed's policy direction remains uncertain given fresh data showing fragility in the U.S. labor market. July nonfarm employment fell by 23,000 positions, while May and June figures were revised down by over 103,000 combined, suggesting the job market may be weaker than previously assessed. "The Fed's challenge now is balancing stubbornly high inflation against a softening labor market," Murachai said. "Although markets are pricing in a rate hike, policy direction could shift based on employment data released this week."

Markets will focus on August nonfarm payroll figures announced Friday, September 4 at 7:30 p.m. Thailand time. The market expects job gains of around 58,000 and unemployment holding at 4.1%. Strong employment and wage growth would support a rate hike, bolstering yields and the dollar at gold's expense. Conversely, a weaker or negative reading could dampen rate-hike expectations and provide relief for gold.

Analysts recommend a "buy-on-dip" strategy rather than rushing in after sharp declines, watching key support levels around $4,300–$4,235 or approximately 67,800–67,000 Thai baht per unit. If price stabilizes at these levels with buying interest, it presents a buying opportunity targeting profit-taking at $4,425–$4,450 (roughly 69,700–70,000 baht). Should gold rally above $4,500 (around 70,500 baht), it would signal easing near-term pressure and potential sustained recovery.