Gold extended its decline on the final trading day of August, according to Moneycontrol, after international spot gold had already fallen more than 3% in the previous session, its biggest one-day drop since June 10. During Monday trading, the metal briefly slipped below $4,400 per ounce before trimming losses later in the session.
The report said the sell-off appeared, on the surface, to be tied to hawkish signals from Federal Reserve Chair Kevin Warsh. But it argued that a deeper shift is now shaping the market: expectations for a weaker U.S. dollar, which had previously helped push gold higher, are running into resistance from higher interest rates and rising U.S. Treasury yields.
In that view, the key dividing line for gold is not simply whether Warsh sounds hawkish. The bigger question is whether upcoming U.S. economic data can support the current rate-hike expectations, and whether the Federal Reserve or the Treasury ultimately gains the upper hand in this policy tug-of-war. Rajeev De Mello, global macro portfolio manager at GAMA Asset Management, said gold could retreat to $4,200-$4,300 per ounce in the short term, though he added that he remains a long-term holder.
Gold extended its losses on the final trading day of August, according to Moneycontrol. In the previous session, international spot gold dropped by more than 3%, marking its biggest one-day fall since June 10. On Monday, it briefly fell below $4,400 an ounce before paring some of the decline.
More than a hawkish signal
The report said the move looked, at first glance, like a reaction to hawkish remarks from Federal Reserve Chair Kevin Warsh. But it pointed to a broader shift underneath the market: expectations of a weaker dollar, which had supported gold's rise earlier, are now facing pressure from higher rates and higher U.S. Treasury yields.
What could define the next move
By that reading, the real bullish-bearish dividing line for gold is not whether Warsh is hawkish. It is whether U.S. economic data can justify this round of rate-hike expectations, and which side prevails in the policy tug-of-war between the Federal Reserve and the U.S. Treasury.
Portfolio manager's view
Rajeev De Mello, global macro portfolio manager at GAMA Asset Management, said gold may pull back to $4,200-$4,300 per ounce in the near term. Even so, he said he is still holding gold as a long-term investor.
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