The precious metals market is demonstrating impressive resilience. Gold not only held the psychologically important level of $4,600 per ounce but also managed to recover part of its recent decline, gaining 0.7%. This rebound comes amid heightened investor attention to the upcoming speech by the Federal Reserve Chair at the annual Jackson Hole symposium.
Yesterday's dynamics interrupted an impressive five-day winning streak. Fresh inflation data came in above the Fed's target, which was immediately reflected in the market: the probability of monetary policy tightening increased, providing support to the dollar and Treasury yields. Nevertheless, gold is showing the volatility typical of safe-haven assets, remaining near historical highs.
Fundamental demand: devaluation sentiment returns
Despite the short-term correction, the overall picture for gold remains extremely positive. Since the start of the month, the metal has risen by approximately 14%. The key driver of this rally was the unexpected intervention by the U.S. Treasury Department in the bond market last week. This move has revived the "devaluation" scenario: investors are actively buying hard assets, hedging against the growing budget deficit and potential dollar weakness.
It is this scenario that secured gold's record growth in 2025. The metal is appreciating at its fastest pace since 1999, firmly holding above the 200-day moving average. For many traders, this is a technical trend reversal signal confirming the strength of the bullish momentum. Institutional capital inflows are also noticeable: gold-backed ETF holdings rose by more than 28 tons over the week — the highest figure since January.
Jackson Hole: Warsh's debut in the market's spotlight
The Jackson Hole symposium is not just an annual gathering of central bank heads, but a venue where fateful decisions are traditionally announced. Suffice it to recall that it was here in 2022 that the Fed announced its shift to a hawkish stance. On Friday, Chair Kevin Warsh will deliver his first major speech in this role, and the market expects clear signals from him.
Warsh is under crossfire of criticism for his secrecy and conservative approach. His rhetoric could turn out "hawkish," leading to higher real yields and a stronger dollar, putting pressure on gold. However, a "dovish" signal, on the contrary, would act as a catalyst for a new leg of the rally, capable of pushing the metal to fresh local highs.
My view: The market is clearly in a state of uncertainty, and gold is stuck in a narrow range awaiting a trigger. Given the macroeconomic backdrop with a growing deficit and active asset purchases by central banks, any hint of softening in Fed rhetoric could trigger a sharp spike in volatility. A breakout above the $4,600 level would open a direct path to new historical highs, and in this scenario I see more chances than in a deep correction.