Spot gold tests the 4,500 mark as Fed rate hike bets cool after Waller’s speech

Huitong Network, September 4— Gold prices rebound from a near four-week low, with the weak US Dollar Index providing support. Before the Friday Non-Farm Payroll (NFP) report is released, Federal Reserve interest rate expectations remain the market focus. From the technical perspective, initial resistance is at $4,500, followed by the 200-day moving average at $4,533.

On Thursday (September 3), spot gold (Gold) continued its rebound. The previous day, gold prices briefly dipped below $4,300, hitting a near four-week low. A sharp strengthening of the yen dragged down the US dollar, and the decline in US Treasury yields provided precious metals with additional support. Spot gold traded around $4,490 intraday, up 2.32% on the day.

The US Dollar Index (DXY), which tracks the dollar against a basket of six major currencies, is currently trading near 98.8550, close to a one-week low; on Wednesday it reached 99.86, the highest level since August 14. The benchmark 10-year US Treasury yield is around 4.75%, marking a second consecutive day of decline—previously, it hit 4.81%, the highest since October 2023.



US economic data delivers mixed signals. For the week ending August 29, initial jobless claims rose to 206,000, slightly above market expectations of 205,000 and the previous value of 204,000. Meanwhile, the August Services Purchasing Managers Index (PMI) climbed to 55.4 from 54.1 in July, exceeding market expectations of 54.3.



A weakening dollar typically supports gold. However, despite robust central bank gold purchases and investment demand providing long-term support, several short-term headwinds may make it difficult for gold to maintain its rebound momentum.

Government bond yields in major economies worldwide have risen to multi-year highs, with continued concerns about fiscal and inflation issues; Middle East conflicts push up oil prices, further boosting inflation expectations. Rising yields increase the opportunity cost of holding non-interest-bearing assets like gold.



Federal Reserve (Fed) rate hike expectations pose an additional challenge, as gold typically performs better in a low interest rate environment. However, dovish comments from Fed Governor Christopher Waller make traders cautious about the likelihood of a September rate hike.

Waller said he "finally sees some signs of easing inflation from the recent data," and stated that "September's rate decision will depend on August inflation data." He added that, if the August data confirms recent progress, he will support keeping rates unchanged.

According to the CME FedWatch tool, the probability of a rate hike at the Fed's September 15/16 meeting has dropped from 63% the day before to about 48%. Traders are now waiting for Friday’s Non-Farm Payroll (NFP) report for new clues on the Fed’s monetary policy outlook.



(Spot Gold Daily Chart Source: Easy Huitong)

The MACD indicator is still below the zero axis and in the negative region, suggesting that although spot prices are well above underlying trend support, bullish momentum remains tentative. The daily chart RSI is at 55, slightly upbeat, reinforcing the "consolidating with a bullish bias rather than overheated" tone.

Upside resistance: Initial resistance is at the $4,500 level, followed by the 200-day SMA at $4,533, and the round number of $4,700.

Downside support: Psychological level at $4,400 offers initial support, followed by the 100-day SMA at $4,357 and the 50-day SMA at $4,231. If prices fall further, the $4,000 level will come into focus as support.