Precious metals lose before Jackson Hole 📉

Precious metals contracts are sharply declining during today's session. Quotations are not helped by a strengthening dollar, which is gaining today after approaching the lowest values since 2023. Yesterday's strong downward revision of the NFP triggered a stronger move toward a dovish narrative, which laid the groundwork for today's reversal after reaching local lows. Now the focus of investors' attention remains on Powell's speech at Jackson Hole. 

Gold is currently losing nearly 1.4% and is struggling to hold the zone of recent peaks, which was pierced on August 16. It is worth remembering that this zone has been tested 3 times in recent months.

Source: xStation 

U.S. bond yields are rebounding after hitting their lowest levels since December 2024, with the 10-year bond yield rising to 3.8597% and the 2-year returning above 4%. This appears to be a reaction to the market's potential overvaluing of a rate cut and a slight centering of yields ahead of Powell's speech, which will begin at 3:00 p.m. BST time tomorrow. Yields have remained in a strong downtrend since mid-May, which is reminiscent of movements in mid-2023. Back then, we also saw the market playing under a potential interest rate cut, although comparing that period to the current one, there is a marked difference in both macroeconomic data and the Fed's narrative. Earlier declines in yields were underpinned for the most part by conjecture with the Fed's line unchanged. Hence, we later saw significant rebounds from January to April highs. 

Yields on U.S. 2-year (white line) and 10-year (blue line) treasuries. Source: Bloomberg Finance L.P. 

Silver, after rebounding from a consolidation zone at around $29.665, is falling to levels of $29. This sphere is marked by the stop of the August 16 uptrend, the breakout of which took the quotation to August peaks. In the medium term, this sphere is delineated by the local peaks of July, where $29 proved to be the resistance that stopped the attempt to stop the downtrend and, as a result, the quotation fell near the May lows. Hence, the drawn support may be a strong zone for the metal, the breakthrough of which opens the way for a reduction of the upward impulse of August 16 and pushing the quotations even to the area of $28.515. 

Source: xStation