Gold's rebound from 4,110.50 nearly matched the 4,113.82 Fibonacci projection, keeping the decline from 4,697.07 in corrective territory. The 10-year Treasury yield stayed pinned near 5.30% even after softer PCE inflation, leaving 4,234.68 and 4,334.57 as the resistance levels bulls still need to clear.
Gold's low at 4,110.50 tested the 4,113.82 Fibonacci projection to the tick, measured from the 4,697.07 to 4,234.68 decline. The near-exact test preserves the reading of the drop from 4,697.07 as a corrective leg rather than a fresh impulsive selloff. Momentum backs that view: four-hour RSI has recovered toward neutral near 48, while MACD has turned higher from a deeply negative reading, though it remains below zero.
The Fed Debate Shifts to Timing, Not Direction
August core PCE rose 0.2% m/m against a 0.3% forecast, while headline PCE increased 0.3% against 0.4% expected. That pushed expectations for another rate hike away from October and toward December. New York Federal Reserve President John Williams said on September 29 that following September's hike, there was "no need for urgency", though another increase could still be appropriate later this year.
But the message was not uniformly dovish. Fed Governor Lisa Cook said inflation had been too high for too long, and Minneapolis Fed President Neel Kashkari said the softer PCE print had not materially changed his view that inflation remained too high. Personal spending still surged 0.9% m/m, with real PCE rising 0.6%, even as real disposable income was flat.
Yields Are the Missing Confirmation
Despite the softer inflation numbers, the 10-year Treasury yield remained around the 5.30% area. That gap matters: softer inflation usually eases the rates channel facing non-yielding gold, but this time the long end did not follow the front-end repricing lower. The rebound from 4,110.50 has therefore stayed restrained rather than explosive.
Two Resistance Levels Still Block the Bulls
The first hurdle sits at 4,234.68, reinforced by the four-hour 55-period moving average near 4,236.86. A firm break above that cluster would be the first evidence that 4,110.50 has formed a meaningful bottom. The bigger test lies at 4,334.57, the 38.2% retracement of the entire 4,697.07 to 4,110.50 decline, with the daily 55 EMA near 4,313.94 just below it. A renewed break below 4,110.50 would instead expose the 100% projection at 3,937.19, next to the prior 3,942.43 low.
Upcoming ISM and payrolls data will test whether yields finally follow the softer inflation signal, giving gold a clearer path through 4,234.68 and, eventually, 4,334.57.
Source: ActionForex
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