Gold and silver prices extended their decline on Tuesday, hitting two-week lows, with silver leading the losses. The sell-off was driven by technical pressure and investor caution ahead of the annual economic policy symposium in Jackson Hole, Wyoming, hosted by the Kansas City Fed. Analysts pointed to the upcoming speech by Federal Reserve Chair Jerome Powell as the next key catalyst for the precious metals markets.
After the U.S. market open, gold quickly breached the key support level of $3,375, accelerating the decline in futures contracts. Prices hit a session low of $3,358.90 per ounce, marking a single-day drop of $24.60 (0.73%) — the lowest level since August 1.
The breakdown suggests a potential shift in gold’s recent sideways trend. From a technical perspective, gold futures breaking below the 100-day simple moving average signals a significant chart damage, often foreshadowing a potential trend reversal. However, spot gold managed to hold above its 100-day moving average — a key support level that has held since January 6.
Silver followed gold lower, falling $0.69 (1.83%) to settle near $37.33 per ounce. It also broke below its 50-day moving average for the first time since May 28.
The Jackson Hole Economic Symposium begins Thursday evening local time. Powell is expected to unveil the central bank’s new policy framework during his speech on Friday. Market participants anticipate his remarks may offer crucial signals regarding a potential September interest rate cut. Today’s breakdown in gold and silver reflects heightened investor anxiety about the Fed’s future policy direction.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, noted that gold and silver have been trading in narrow ranges as the market awaits the next catalyst — Powell’s keynote speech on Friday. He stated that the market will scrutinize Powell’s wording, particularly regarding the Fed’s tolerance for inflation amid signs of slowing economic growth.
A clear signal from the Fed confirming a September rate cut and hinting at a more accommodative policy stance through year-end would likely weaken the U.S. dollar and push real yields lower, providing a boost for both metals.
Despite the recent pullback, the long-term bullish case for gold remains firmly in place. Recently, analysts at UBS raised their gold price target for next year, citing expectations of persistent U.S. macroeconomic risks and de-dollarization trends fueling safe-haven demand. They highlighted robust demand from exchange-traded funds (ETFs) and central banks. Earlier this month, Citi also raised its short-term gold price outlook to a range of $3,300 to $3,600 per ounce, based on inflation concerns stemming from tariffs.
