Wall Street indecisive after gold price rollercoaster ride, Main Street clings to bullish majority as CPI takes center stage

Gold prices saw another volatile week, as a sharp midweek rebound driven by softer yields, a weaker U.S. dollar, and less-hawkish Fed commentary was largely erased on Friday after stronger-than-expected U.S. payrolls revived expectations for a September rate hike. Spot gold kicked off the week trading at $4,439.15 per ounce on Sunday evening, and the yellow metal initially came under pressure as traders continued to digest the prior week’s sharp selloff, elevated Treasury yields, and lingering inflation concerns tied to oil prices and the U.S.-Iran conflict. The decline accelerated Tuesday, with gold breaking below $4,300 overnight to set the weekly low of $4,282.61 per ounce before buyers emerged. Gold prices recovered Wednesday, and rallied sharply on Thursday after softer private-sector labor data, easing Treasury yields, and less hawkish comments from Fed Governor Christopher Waller helped traders trim expectations for an imminent Fed hike. The move carried spot prices back above $4,500, where gold set its weekly high at $4,511.08 per ounce on Thursday. But the rebound failed Friday morning after the August nonfarm payrolls report showed the U.S. economy added 162,000 jobs, well above expectations, while the unemployment rate held at 4.1%. The stronger labor market data pushed the U.S. dollar and short-term Treasury yields higher, revived the Fed rate-hike trade, and sent gold sharply lower in the minutes after the release, with spot prices falling as low as $4,365.57 per ounce. After recovering part of the post-payrolls selloff but failing to reclaim $4,500, spot gold was last trading at $4,432.33 per ounce Friday afternoon, leaving the yellow metal marginally lower on the weekly chart The latest Kitco News Weekly Gold Survey showed Wall Street split between bulls, bears, and fence-sitters after gold’s mercurial week, while Main Street pared back its bullish majority following another failed breakout. “Gold looked ugly at the end of the previous week, and it saw sharp losses through the middle of last week,” said Marc Chandler, managing director at Bannockburn Global Forex. “The low was about $4283 basis spot. It bounced above $4500 when it was sold again. The technical condition still looks weak, and the momentum indicators are falling. A break of the $4280 area signals the next leg lower, possibly the $4200 area.” “Down,” said Darin Newsom, senior market analyst at Barchart.com. “Much of this depends on how far gold sells off Friday following the release of the monthly comic relief known as jobs numbers. The August figure came in at 162,000, more than 100,000 over the pre-report guess, making the US economy seem better than it is. However, this number will be revised, whittled away, over the coming months, so in the big picture it doesn’t mean anything long-term.” “That being said, if gold doesn’t melt down to end heading into the three-day US holiday weekend, it has some room to fall back to this week’s low of $4,396.40 with the 45-day moving average still well below near $4,320.” “Unchanged,” said Adrian Day, president of Adrian Day Asset Management. “Gold is likely to remain in a range, without clear direction, awaiting an interest rate decision by the US Federal Reserve in less than two weeks. While the strong jobs growth report supports a rate hike–and market participants are betting that way–still the question is by no means certain, as the Fed has historically avoided major decisions ahead of elections.” “Upcoming economic releases, including the August Consumer Price Inflation report a few days before the Fed meeting, will weigh on the decision and thus the gold market,” Day added. “Up,” said Rich Checkan, president and COO of Asset Strategies International. “The jobs numbers may have taken the wind out of gold’s sales today, but there is more wind coming. Even if fears of interest rate hikes continue to mount, the debt continues to mount as well. Gold’s path is higher.” Kevin Grady, president of