Gold price sinks near two-week low: could US jobs data trigger the next crash?

Gold remained under pressure on Tuesday, hovering near its weakest level in almost two weeks as traders shifted their attention from Jackson Hole to a packed US labour-market calendar that could decide whether the Federal Reserve raises interest rates in September.

Spot gold traded around $4,450 an ounce in Asian hours after touching its lowest level since August 19 on Monday.

Bullion has retreated sharply from last week’s three-month high after Fed Chair Kevin Warsh used Jackson Hole to warn that policymakers may need to tighten again if inflation fails to move convincingly towards 2%.

Markets now put the probability of a September increase at about 66%.

Jobs week becomes the next catalyst

The first test comes later Tuesday with July’s JOLTS job-openings report, due at 10 am ET.

Openings stood at 7.4 million in June, while the market expects July to show only a modest decline towards 7.3 million.

The ADP private-payroll report follows on Wednesday, before the official August employment report arrives Friday at 8:30 am ET.

That sequence matters because July payrolls unexpectedly fell by 23,000 and previous months were revised lower, making employment the clearest potential counterweight to Warsh’s inflation concerns.

FXStreet analyst Dhwani Mehta sees $4,400 as an increasingly important near-term battleground.

Her technical assessment puts the 21-day moving average near $4,430, followed by the 100-day average around $4,366. A recovery through the 200-day average near $4,531 would strengthen the bullish setup again.

Warsh has reset the rate trade

Warsh’s Jackson Hole message changed the way markets are approaching bullion. September is no longer being treated as an easy hold, with investors again debating whether the Fed may need to resume tightening.

CME pricing showed roughly a 66% probability of a September increase on Monday, up sharply from a week earlier. Barclays expects two quarter-point increases before year-end, in September and December.

IG market analyst Tony Sycamore said that a single rate increase would probably not fundamentally undermine gold’s longer-term case, but a sequence of two or three could become much more damaging.

That distinction matters because gold generates no income. Sustained increases in real yields therefore create a much stronger headwind than one isolated policy move.

Iran creates a two-sided risk for bullion

Renewed US-Iran fighting is offering safe-haven support, but it is simultaneously pushing oil and inflation expectations higher.

Brent climbed above $91 a barrel on Tuesday after Washington and Tehran exchanged direct attacks for the first time in about a month.

Shipping through the Strait of Hormuz also remains heavily constrained, keeping the threat of another energy-supply shock alive.

That creates an awkward trade for gold. Geopolitical escalation can increase demand for defensive assets, but higher energy costs can also strengthen the Fed’s case for tighter policy.