Gold Price Slips to Two-Week Low as Yields Rise

Gold fell to its lowest level since August 19 on September 1 as rising Treasury yields, a stronger dollar, and higher oil prices lifted futures-implied odds of a September rate hike following Federal Reserve Chair Kevin Warsh’s August 28 Jackson Hole remarks. These factors pressured non-yielding metals.

Gold Slides on Hawkish Fed Comments and Rising Yields

Spot gold traded near $4,369 per ounce by 10:03 GMT on September 1, marking its lowest since August 19. Warsh’s Jackson Hole speech was interpreted as hawkish, raising market expectations for a September rate increase to roughly 60–67%. His emphasis on the need for inflation to move clearly and swiftly toward the Fed’s 2% target prompted a short-term repricing.

The 10-year Treasury yield approached its highest level since January 2025, near 4.7%, while 2-year yields jumped more than 10–12 basis points after Warsh’s remarks. The firmer dollar and rising yields increased the opportunity cost of holding non-yielding assets like gold.

Renewed U.S.–Iran military tensions, including a U.S. strike on Larak Island, pushed Brent crude above $90 per barrel and U.S. crude above $86. Higher oil prices reinforced inflation concerns, supporting longer-maturity Treasury yields and limiting gold’s gains despite safe-haven demand.

Treasury Buybacks Expand as Gold Faces Technical Pressure

On August 19, the U.S. Treasury announced it would raise the maximum size per buyback operation for 10–20 and 20–30 year nominal coupon Treasuries from $2 billion to at least $4 billion. It also increased long-dated buybacks from two to four operations per quarter and raised the combined quarterly buyback ceiling to about $83 billion, adding at least $14 billion to long-term bonds. The Treasury described the expansion as liquidity support and said further details would be provided at the November 4 quarterly refunding.

This planned doubling of long-dated buybacks revived the narrative of U.S. dollar debasement, which had supported precious metals and helped push gold to a more than three-month high near $4,696 in late August. However, this fiscal tailwind has been overwhelmed recently by rising yields and hawkish Fed pricing.

Technically, gold broke below its 200-day moving average at $4,526.24 on August 28, moving roughly 20% below its all-time high of $5,602. Short-term momentum has faded, with the World Gold Council identifying support near the mid-August low around $4,311 and the 55-day average near $4,215. Resistance lies at the 13-day exponential moving average near $4,474 and the 200-day average, which is key to regaining an uptrend.

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Analysts view the near-term outlook for gold as negative due to elevated yields, a stronger dollar, and the recent oil price shock, which squeeze non-yielding assets. However, fiscal risk and currency-debasement themes linked to Treasury buybacks maintain medium-term interest in the metal.

Markets will focus on upcoming U.S. jobs data and the Federal Reserve’s mid-September meeting for further signals on policy direction and yield outlook.