Legal News Update: Gold price prediction today: Will gold trade with bearish bias? Check September 1, 2026 outlook
The yellow metal is likely to consolidate in near term with a possible test of support at $4370.
Gold price prediction today: Gold prices are under pressure due to the US Federal Reserve chair’s hawkish outlook, says Praveen Singh, Head Currencies and Commodities, Mirae Asset ShareKhan.
Gold Price Performance:
- The Fed Chair Warsh, in his much-awaited maiden speech at the Jackson Hole Symposium on August 28, delivered a hawkish message as he expressed concerns over elevated inflation. Although, sticking to his policy of ‘no forward guidance’ he did not signal a rate hike, he said that the Fed officials need to act if inflation does not come down quickly.
- Gold prices settled with a steep loss of 3.15% at $4455 Friday. The yellow metal slumped 3.2% in the week ending August 28.
- At the time of writing this article on the night of August 31, spot gold was trading with a daily loss of ~0.40% at $4436. Escalating US-Iran tensions leading to a surge in oil prices at the start of the week is adding to downside pressure.
Warsh’s Speech at Jackson Hole Symposium:
- Warsh was clearly hawkish in his speech as he said that underlying trends of CPI and PCE inflation readings are not very encouraging and officials will have to act if inflation does not start falling soon.
- He added that responsibility of inflation running above the Fed’s goal for 65 months lies squarely with the Federal Reserve and price pressures are unlikely to recede on their own.
- Notwithstanding a much weaker-than-expected US nonfarm payroll report for July, he described the US labour market currently with unemployment at 4.1% and jobless claims near their lowest levels in decades as consistent with full employment.
- The Fed chief also confirmed that short-term interest rates are the predominant tool to achieve the dual mandate of price stability and full employment.
- Warsh also spoke against the US Treasury Secretary Bessent’s plan to expand long-term bond buyback plan saying that unconventional policies to spur economic activity may suit genuine crises but should otherwise be used sparingly, if at all.
Geopolitics and oil:
- The US forces attacked Iran’s Larkan Island in the Strait of Hormuz as the US Central Command claimed that IRGC forces were preparing to deploy mines in the Strait. In retaliation, Iran attacked US bases in UAE and Jordan Monday.
- Crude oil prices jumped as the US and Iran exchanged strikes for the first time in nearly a month.
- At the time of writing this article, Brent oil futures were trading with a daily gain of ~5% at $90.54.
Fed rate hike possibility:
- Probability of the Fed hiking rates in its September 16 FOMC meeting stands at 66% as compared to 41% seen a week ago.
Event roundup:
- G20 finance ministers and central bank governors are meeting in Asheville, North Carolina, for talks on key global economic and financial issues, through Sept. 1. The US Treasury Secretary Bessent is expected to make direct appeals to counterparts as the US intends to isolate Iran economically. A Treasury official said Bessent will deliver a strong statement to the G20 to urge compliance with US sanctions if they want to continue operating in the dollar-based financial system, according to Bloomberg.
- The Shanghai Cooperation Organization (SCO) annual summit is held in Bishkek, Kyrgyzstan, through Sept. 1. Russian President Vladimir Putin and Indian Prime Minister Narendra Modi will meet during the gathering.
Data roundup:
- Preliminary benchmark payrolls revision report released Friday revised US payrolls in the twelve months through March 2026 down by 79K jobs.
- Defying the possibility of impacts of the Iran war, India’s economy expanded faster than expected in the April-June quarter. Gross domestic product grew 7.8% from a year earlier in the April-June quarter, Vs the 7.3% median estimate as manufacturing and financial services boosted growth. Manufacturing expanded 9.2%, while financial services grew 12.1% in the three months to June.
- China’s factory activity improved more than forecast but contracted for the second straight month in August due to a worsening slump in construction and the poor performance of the services industry. The official manufacturing purchasing managers’ index rose to 49.8 Vs the forecast of 49.50, while even the non-manufacturing measure of activity in construction and services stalled at 49 (forecast 49.4). The PBoC may cut banks’ reserve requirement ratio later this year to spur growth.
ETF and COMEX inventory:
- Total known global
gold ETF holdings stand at 99.04 Moz as strong ETF buying in August has brought ETF holdings up 0.09 Moz YTD. Investors have added ~73 tons of gold to their ETF positions in August. Consequently, holdings jumped 2.4% in August as rate cut hike chances declined slightly following disappointing US nonfarm payroll and US Treasury’s interventions in forex and treasury markets. - Registered COMEX gold inventory at 14.88 MOz has risen sharply (4.86%) from the cycle low of 14.19 Moz seen on August 7.
CFTC positioning:
- Money managers increased their bullish gold bets by 5,393 net-long positions to 151,315– the most bullish in about 11 months as long-only positions rose 6,044 lots to 163,217 in the week ending Aug. 25. The long-only total was the highest in more than 10 months, while short-only positions rose 651 lots to 11,902 lots -the highest in four weeks.
Possibility of domestic import duty cut:
- As high import duty on precious metals have failed to curb domestic demand for precious metals meaningfully, the Indian government is thinking of cutting duty again to reduce revenue losses due to smuggling.
- The Centre hiked import duties on gold and silver from 6% to 15% in May.
- Markets are gradually discounting the possibility of a reduction in duties.
Upcoming data:
- Major US data on tap this week include August ISM manufacturing (September 1), July JOLTs job openings (September 1), August ADP employment change (September 2), August ISM services (September 3) and August nonfarm payroll (September 4). August payroll report may be weak due to reduced government hirings. Even, JOLTs job openings are expected to show the third straight decline.
- Traders will also monitor Eurozone’s CPI (September 1); Eurozone’s and the UK’s manufacturing PMI (September 1; Eurozone’s and the UK’s services and composite PMIs (September 3).
- China’s RatingDog manufacturing PMI (August) will be released on September 1, while RatingDog services and composite PMIs will be out on September 3.
Gold Price Outlook:
- Warsh’s hawkish speech on August 28 has communicated three important messages: the Fed is serious about price stability, impact of rise in long-term bond yields may not be as severe as feared earlier and the Fed is asserting its independence to do the needful despite immense political pressure. This is why gold is reeling under selling pressure.
- US ISM services and nonfarm payroll reports will be crucial for short term directions, though unless the monthly job report is extremely weak, uncertainty over the Fed rate hike is unlikely to get resolved.
- Domestic gold prices can come under additional pressure due to discounting of import duty cuts.
- The yellow metal is likely to consolidate in near term with a possible test of support at $4370. Downside may be cushioned ahead of Friday’s nonfarm payroll report release. Next major support is seen at $4300-$4320. Resistance is at $4525-$4535/$4570.
(Disclaimer: Recommendations and views on the stock market, or any other asset classes or personal finance management tips given by experts and analysts are their own. These opinions do not represent the views of The Times of India.)
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