Interest rate reversal expectations put pressure on gold
World gold prices plummeted sharply in the last trading session of the week, closing the week at 4,454.4 USD/ounce, down about 3.18%. Silver prices also suffered strong selling pressure, losing 4.17%, to around 66.25 USD/ounce.
The deep drop in gold took place in the context of the market simultaneously adjusting expectations about the monetary policy of the US Federal Reserve (Fed).
The most important reason for the plunge in gold prices comes from tougher signals about inflation and interest rates in the US.
In his speech at the Jackson Hole conference, Fed Chairman Kevin Warsh continued to emphasize the task of bringing inflation to a stable level, while showing that prolonged price pressure is still a major risk to the economy.
This message caused the market to quickly adjust expectations about the Fed's next move. The probability of the Fed raising interest rates in September was raised to about 57.5%, from the previous level of 35.9%.
Expecting interest rates to rise again is particularly unfavorable for gold. Precious metals do not bring fixed yields, so when interest rates and bond yields increase, investors tend to switch to better profitable assets.
The yield of US Treasury bonds with a 2-year term increased by 11.8 basis points, to 4.348%. The yield of 10-year bonds also fluctuated around the 4.7% range.
At the same time, the USD index increased by about 0.5%. A stronger greenback continues to put more pressure on gold because the precious metal valued in USD becomes more expensive for buyers using other currencies.
Employment data does not boost gold
Another factor causing selling pressure to increase is that job adjustment data in the US is not as weak as some markets once feared.
Preliminary data shows that jobs in March 2026 were recorded to be about 79,000 jobs higher than reality.
This adjustment level is significantly lower than expected for a sharp downward correction. Therefore, the market did not receive signals weak enough to reinforce the Fed's ability to soon ease monetary policy.
This has rapidly weakened expectations of gold support from interest rate cuts.
Gold prices break a series of support levels
Strong selling pressure not only pulled gold prices down sharply but also caused the precious metal to penetrate many important technical zones.
Notably, gold fell below the 200-day moving average at around 4,526.24 USD/ounce. This is one of the indicators commonly used by investors to assess medium and long-term trends.
Gold prices then continued to lose the 4,481.78 USD/ounce zone and approached the support zone of 4,458.52 USD/ounce.
If the 4,458.52 USD/ounce zone continues to be breached, downward pressure may expand to lower levels around 4,319.60 USD/ounce and 4,230.51 USD/ounce.
In the opposite direction, to improve the short-term trend, gold needs to regain the 4,504.07 USD/ounce zone. The next resistance levels are around 4,526.24 USD/ounce and 4,604 USD/ounce.
The diễn biến of silver also shows that selling pressure is spreading on the precious metal market. Efforts to surpass 70 USD/ounce failed, then silver lost the areas of 69.96 USD, 69.50 USD and 67.69 USD/ounce respectively.
Oil prices fall, shelter weakens
Besides the monetary factor, developments in the energy market also make gold lack more support.
Brent oil prices fell to around 89.31 USD/barrel, while WTI oil traded around 83.18 USD/barrel, as the market assessed the possibility of improved transportation through the Strait of Hormuz.
Cooling oil prices partly reduced concerns about inflation and safe-haven demand. In that context, pressure from the USD, bond yields and expectations of the Fed maintaining a tough stance became the main factors dominating gold.
The article only updates market developments, not investment recommendations. Investors need to be cautious in the face of strong market fluctuations and carefully consider risk factors before making decisions.
