Artem Voloskovets
The decline follows a powerful run: COMEX gold had risen for four consecutive sessions through Monday, gaining about 6.3%, while August gains reached roughly 14.6%.
A 1% decline after this kind of rally is not a bearish signal by itself. The more important question is whether buyers return around $4,600.
Saxo Bank analyst Ole Hansen attributed Tuesday’s weakness primarily to profit-taking and a recovery in the dollar. He nevertheless argued that the fundamental reasons investors have returned to gold remain intact.
Why $4,600 Matters
Gold now faces two competing forces. Fiscal and geopolitical uncertainty continue to support safe-haven demand, while high U.S. interest rates and Treasury yields increase the opportunity cost of holding non-yielding bullion.
Investor demand also remains substantial: gold-backed ETFs attracted 46.7 metric tons, worth about $6.4 billion, last week — their largest weekly inflow in 10 months.
The ETF flows suggest this is more than a momentum trade. But if gold breaks decisively below $4,600 despite strong institutional demand, it would be an early warning that the rally has moved too far, too quickly.
Attention now shifts to U.S. inflation data and Fed Chair Kevin Warsh’s Jackson Hole speech. Markets currently price roughly a 40% probability of a September rate hike, making interest-rate expectations a key near-term driver for bullion.
The biggest short-term risk for gold is not fading geopolitical tension. It is a combination of sticky inflation, higher Treasury yields and a stronger dollar.
$4,600 is the key level. Holding it would leave the broader rally intact; a sustained break could trigger a deeper correction after August’s rapid advance.
Artem Voloskovets
