Gold rallied overnight, breaking above $4,670 to hit a fresh thirteen-week high. This means that it has tacked on an impressive 16% so far this month after trading below $4,000 per ounce at the end of July. Early last week, gold appeared to be stuck around $4,400 and unable to build on sharp gains from early August.
But it broke out to the upside last Wednesday after US Treasury Secretary Scott Bessent announced a doubling of government bond repurchases at the long end of the curve. This led to a sharp drop in 10 and 30-year Treasury yields and a corresponding slump in the US dollar. This helped to boost both gold and silver as these two precious metals have shown a close inverse correlation to the dollar since they pulled back from their respective all-time highs at the end of January.
Gold's daily MACD suggests that momentum still points upwards. Yet it has rallied a long way in a short period of time so it shouldn't be a surprise to see a pullback, or at least some consolidation, for the market to adjust to recent gains.
Source: TN Trader
There are a few events this week which could trigger some sharp moves. These include US Treasury Secretary Scott Bessent's Iranian sanctions package later today, along with Wednesday's Core PCE inflation release and Fed Chair Kevin Warsh's Jackson Hole speech on Friday.
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