Gold Falls Below $4,600 as Market Awaits Chair Warsh's Address Tonight

1. Gold Retreats to Near $4,580



During the Asian session on August 28, spot gold continued its retreat from above $4,600. As of around 10:00 Beijing time, gold traded at $4,578.16/oz, down $22.86 or 0.50% intraday. The session opened at $4,605.33, touched a high of $4,611.54, and tested a low of $4,575.13.

In the previous trading day, gold briefly spiked to $4,643.18 before dropping to a low of $4,565.67, eventually closing near $4,600. Entering Friday, gold once again broke below the $4,600 mark and has now settled around $4,580. The market has clearly turned cautious ahead of the critical Jackson Hole address.

2. PCE Remains Elevated as Fed Officials Focus on Inflation



The U.S. July PCE price index released this week rose by 3.7% year-over-year, unchanged from June and still significantly above the Fed's 2% long-term target. Following the data release, market expectations for a further rate hike in September remained above 30%.

During the Jackson Hole Symposium, several Fed officials have shared their views. Kansas City Fed President Schmid stated that price pressures remain stubborn, and the current interest rate level may not be restrictive enough for the economy. Cleveland Fed President Hammack similarly believes that with inflation staying above target for an extended period, vigilance is still required.

However, Boston Fed President Collins adopted a relatively milder tone, noting signs of improvement in the prices of certain goods and services. Consequently, significant divergence remains in the market regarding future policy paths.

3. Employment Data Remains Stable



U.S. initial jobless claims for the latest week dropped to 203,000, marking the second consecutive week of decline and falling below market expectations. Continuing claims also dropped to a near one-month low.

The labor market has yet to show significant deterioration, giving the Fed room to keep its focus on price pressures. Meanwhile, the U.S. goods trade deficit widened to $118.8 billion in July, driven by an increase in capital goods imports, while AI-related infrastructure investments remained robust.

These data points suggest that although some indicators of the U.S. economy have cooled, there has been no rapid overall downturn.

4. Warsh's Jackson Hole Address Imminent



The biggest event currently driving the market is Fed Chair Warsh's speech at the Jackson Hole Economic Symposium. According to the official agenda published by the Kansas City Fed, the 2026 conference is held from August 27 to 29. Warsh is scheduled to deliver the opening remarks at 8:00 AM local time on August 28, which corresponds to approximately 22:00 Beijing time tonight.

This year's theme is "Financial Innovation: Implications for Payments and Policy." Beyond his assessment of inflation and employment, the market will closely watch whether Warsh addresses the Fed's policy communication methods and the future trajectory of interest rates.

5. U.S. Treasury Buybacks Remain in Focus

Following the U.S. Treasury's previous expansion of its long-term bond buyback program, long-term yields had noticeably declined. However, volatility has recently returned to the bond market. On Thursday, the U.S. 2-year Treasury yield rose to near 4.23%, and the 10-year yield climbed to around 4.672%.

Simultaneously, the Treasury completed approximately $183 billion in short-to-medium-term debt issuance this week, with demand for the 7-year note auction remaining generally stable. The market is still observing how long the expanded long-term bond buyback measures can be sustained and whether operational sizes will be adjusted further.

Market Outlook

As of around 10:00 Beijing time, spot gold has retreated from above $4,600 to $4,578.16. In the short term, focus is primarily on the $4,565 to $4,575 support zone, while resistance is re-evaluated near the $4,600 and $4,640 levels.

Today's true critical event remains Warsh's speech at Jackson Hole. Given the persistently high PCE, relatively stable employment data, and internal disagreements within the Fed, the phrasing regarding inflation and future policy in his address will likely be the primary catalyst determining whether gold can reclaim the $4,600 mark.