On August 24, last Friday, we noted that weak U.S. employment data and cooling inflation had dampened expectations of a September rate hike, while the doubling of U.S. long-term Treasury buybacks acted like a form of localized quantitative easing, pressuring the dollar. These factors collectively supported gold prices, and short-term technical signals indicated further upside potential. We therefore advised focusing on support at $4,540, followed by $4,500, with resistance at $4,600, and a breakout targeting $4,630 and $4,670.

In subsequent trading, gold continued its upward probe during Friday's European session, peaking at $4,604 before meeting resistance. After the U.S. market opened, it dipped to $4,563, found stability, and then rallied again, firmly holding the $4,600 round number to reach a fresh daily high of $4,632. The short-term momentum remained robust.

Overall, gold's brief advance to a three-month high aligned closely with our expectations. According to a senior analyst at Wolfinance, despite ongoing U.S.-Iran tensions pushing oil prices to one-month highs, the market's inflation expectations only briefly constrained gold. Instead, a confluence of supportive factors drove the metal to sustained gains and a three-month peak.

Specifically, the primary drivers supporting gold's trajectory are twofold. First, soft U.S. employment data, alongside declines in both CPI and PPI, signal cooling inflation and reduce the likelihood of a September Fed rate hike. Second, the U.S. Treasury's unexpected move to double its long-term bond repurchase program functions similarly to partial quantitative easing, weighing on the dollar. Looking ahead, if market expectations for tighter monetary policy continue to fade, gold could have room to extend its rally.

On the daily chart, last week's breakout pushed gold to new cycle highs, underscoring its strong near-term posture. Immediate support is seen at the $4,600 round level, which coincides with the 4-hour MA5 line, last Friday's Asian-European session resistance-turned-support, and the vicinity of the U.S. session pullback low. Further support lies at $4,563, where gold stabilized during Friday's U.S. session. On the upside, resistance is at Friday's high of $4,632, followed by the 4-hour Bollinger Band upper rail at $4,670 and the $4,700 round number.

The Bollinger Bands are expanding upward, moving averages are in a bullish alignment, and the MACD, KDJ, and RSI indicators all show bullish crossovers, suggesting the technical backdrop favors further gains. For the day ahead, with weak employment data, cooling inflation, and the Treasury's bond buyback expansion acting like partial QE, the dollar remains depressed near three-month lows, underpinning gold. We recommend a range-trading approach: support at $4,600 and $4,563, resistance at $4,632, with a breakout opening the path toward $4,670 and $4,700.