Gold appears to have stabilized around $4,480 an ounce after rising more than 2% on Thursday. Silver edged up 0.1% to $66.90, while platinum and palladium were essentially unchanged.
The market turn was triggered by Federal Reserve Governor Christopher Waller's remarks yesterday, in which he indicated he was prepared to support holding rates steady if price pressure continued to ease. He said his decision would be heavily influenced by August inflation data due next week. "But if inflation comes in hot, I would consider a rate hike," he added, while noting that recent data show some signs of disinflation.
The market's reaction to that caveat was disproportionate to its content. Traders cut the probability of a rate increase at the September 15–16 meeting to roughly 50%, down from about 70% at the start of the week. Holders of gold benefited from this repricing since the metal pays no yield and gains when the opportunity cost of holding cash falls. Losers include those who had positioned for a hawkish outcome after Kevin Warsh's Jackson Hole speech—a sizeable group over the past week.
It is worth asking whether Waller actually said anything new. In my view, he did not, and that is the essential point. He simply reiterated that his decision will be data-dependent—a routine stance for a committee member. The market reacted sharply because, after Jackson Hole, positioning skewed more hawkish than the data warranted, and the first dovish signal prompted widespread position-squaring.
A second source of support for precious metals was the yen. The currency strengthened almost 2% on Thursday, recovering much of a month-long decline, as markets priced a greater chance of a Bank of Japan rate rise. It was the yen's best day since the coordinated Tokyo–Washington market intervention a little more than a month ago, and growing odds of another intervention added pressure on the dollar. The US currency slid to a May low, making gold cheaper for holders of other currencies.
The causal chain works through the dollar and benefits bullion from two directions simultaneously. A dovish Fed signal reduces yields on dollar assets, a prospect of BoJ tightening draws carry-trade capital back into the yen, and a weaker dollar mechanically lowers the foreign currency price of gold. It is a rare case in which policy moves in the two largest economies push the metal in the same direction.
The week has been jagged. On Tuesday gold plunged, losing almost 6% over three sessions amid renewed strikes on Iran and hawkish rhetoric, then bounced and now sits modestly higher for the week. The amplitude itself indicates the market has no stable view and is reacting to each incoming signal with amplified volatility.
I think the decisive input for gold will not be today's employment report but the inflation prints next week that Waller explicitly referenced. If the August CPI confirms disinflation, the probability of a September hike will fall below 40% and gold will have a case to push toward $4,600. A hot print would push hike odds back toward 70% and drive the metal back toward roughly $4,300. The main risk to this outlook remains geopolitical: any fresh escalation around the Strait of Hormuz could lift oil and inflation expectations simultaneously, a scenario that tends to hurt gold through the interest rate channel even as it supports the metal's safe-haven appeal.
A technical picture for gold suggests that buyers need to clear resistance at $4,481 to target $4,540, above which further gains will be difficult without fresh momentum. The farther target is around $4,609. On the downside, bears will attempt to seize control of $4,425. If they succeed, a break of the range will inflict serious damage on bullish positions and push gold toward $4,372 with a prospect of extending to $4,304.