On September 3, international spot gold began its rebound journey during the overnight session, providing what felt like a deep pullback experience to the 4300 level. However, the actual support zone sits around 4330, with the 4300 level merely representing a speculative breakdown designed to trigger stop-losses. Although the lower depth of 4280 was touched once, this direct V-shaped recovery more closely resembles a retaliatory shakeout meant to clear out retail traders. Before entering a period of rapid ascent, gold consistently displays such landslide-style volatility.
Adding to the equation is Warsh's verbal hawkish commentary supporting rate hikes, which served only as a catalyst. The rapid rally witnessed this week already indicates the underlying fragility of the situation. We need not debate whether the September FOMC meeting will deliver an actual rate increase, as the answer will be revealed by mid-month. What deserves our attention now is how far gold can rebound following this week's Non-Farm Payrolls report, given that prices have already reached the 4490 neighborhood on the upside, with support established at 4462.
The rebound continues unabated. If this week's closing price can secure a level at or above 4500, or even 4600, then the Federal Reserve would have virtually no tool left to interrupt gold's upward momentum—short of an actual rate hike. While it remains highly probable that the Fed will not raise rates, the speculative hype surrounding rate increases has already faded. Gold's advance appears unstoppable, having surged from the 4000 round number to within striking distance of 4700 in just two weeks. Should September pass without a rate hike, one can only imagine how quickly the next push toward the 5600 level might unfold from the 4700 base.
On the technical front, the four-hour chart displays a steadily operating golden cross. While the downside moves have been swift, the recovery velocity is equally impressive. Since the March decline, this rebound has occurred in a shorter timeframe with greater magnitude. Maintaining a bearish stance is no longer appropriate; this shakeout has clearly signaled the market's chosen direction. Pullbacks serve as buying opportunities at lower levels. Within this volatility, countless retail participants were likely forced out of their positions, unable to psychologically withstand such washout spreads.
With Non-Farm Payrolls data looming today, the release could exert some downward pressure on gold regardless of whether the figures come in bullish or bearish. The metal's rebound has already covered roughly half of its expected trajectory, making a timely pullback entirely reasonable. The NFP report carries inherent selling implications for gold either way, and a consequent correction would follow a well-established pattern.
Yet such pullbacks represent little more than symbolic pressure. Every retracement remains an opportunity to build long positions. Carefully identify entry points below the 4500 level and initiate longs, as a further upside phase is likely before the intraday data release. Entering longs at 4500 with a break-even stop-loss in place allows positioning ahead of the NFP announcement. If the data proves bullish, it would add a welcome boost, potentially driving gold's rally straight toward 4600. Conversely, in the event of bearish figures, be prepared to average down or establish fresh long entries at lower prices.
Sprott Physical Gold Trust and Sprott Physical Gold & Silver Trust remain viable vehicles for investors seeking direct exposure to this precious metals rally.