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Published: 3 September 2026,10:52
Daily Market Analysis New
*US-Iran tensions and Strait of Hormuz risks are keeping inflation concerns elevated.
*Markets now price around 62–67% odds of a September hike, supporting the USD and Treasury yields.
*August ADP payrolls rose only 38K, increasing downside risks for the dollar.
The US dollar and gold are currently being driven by a tug-of-war between renewed inflation risks and weakening US labour-market conditions. Renewed US-Iran military tensions have pushed oil prices back above $90 a barrel, with the Strait of Hormuz remaining a key geopolitical risk for energy markets. The resulting oil shock has reinforced inflation concerns and strengthened expectations that the Federal Reserve may keep policy tighter for longer, with markets now pricing roughly a 62–67% probability of a September rate hike, up sharply from around 37% a week earlier. This has provided underlying support for the US dollar and Treasury yields, while initially weighing on gold.
However, the latest US economic data is creating a counterforce. The August ADP report showed private payrolls rising by only 38,000, below expectations of around 47,000 and pointing to softer labour-market momentum. Treasury yields have subsequently eased from multi-year highs, while the dollar’s earlier advance toward 99.8–99.9 has lost momentum. Fed officials have also delivered a more nuanced message, with New York Fed President John Williams noting that inflation continues to ease as tariff effects fade and that elevated long-term yields appear to reflect economic strength rather than renewed inflation pressures. This leaves the USD outlook increasingly two-sided: higher oil prices and hawkish Fed expectations support the dollar, while weakening employment data and lower yields create downside pressure.
The yen has added another layer of pressure on the dollar, with USD/JPY falling sharply from the 160 area as markets increased expectations for further Bank of Japan tightening. BoJ board member Hajime Takata’s call for more nimble rate increases helped drive the yen toward 157.55, its strongest level in nearly a month. At the same time, gold has entered a short-term recovery phase, with spot prices rebounding above $4,400/oz as the dollar and Treasury yields eased. Gold continues to benefit from safe-haven demand amid geopolitical tensions and from expectations that weaker US employment could eventually reduce the need for aggressive Fed tightening. However, the upside remains constrained by the oil-inflation channel: higher crude prices could keep inflation elevated, limit the Fed’s ability to ease policy and push yields and the dollar higher again.
With Friday’s US NFP report now the key near-term catalyst, the direction of both assets will likely depend on whether the labour-market data reinforces or challenges current Fed expectations. A weaker-than-expected payrolls reading, particularly alongside a higher unemployment rate or softer wages, could reduce September hike expectations, pressure Treasury yields and the dollar lower, and create a stronger environment for gold to extend its rebound toward $4,500. Conversely, a strong NFP would reinforce the higher-for-longer narrative, potentially lifting yields and the USD while putting renewed pressure on gold. Overall, the fundamental picture remains mixed for the dollar and cautiously bullish for gold.
Gold remains bearish despite the recent rebound from the 4,310 support. Price previously broke below the 4,520 support and the descending trendline, triggering a sharp decline toward 4,310. The current recovery has pushed the price back above 4,375, but 4,520 remains the key resistance level. A sustained break above 4,520 would ease the bearish pressure and potentially open the way toward 4,645, followed by 4,695. On the downside, a break below 4,310 would reinforce the bearish outlook and expose 4,220 as the next major support.
Momentum indicators suggest that short-term recovery momentum is building. RSI has rebounded to 48.08 from oversold territory and moved above its signal average at 34, indicating that selling pressure has eased, although RSI remains below the neutral 50 level. Meanwhile, MACD is showing early signs of recovery, with the MACD line moving above the signal line, while the histogram has turned positive. This suggests that a short-term technical rebound may continue, but the broader structure remains bearish until key resistance is reclaimed. Overall, the bias remains bearish below 4,520, with 4,375–4,310 acting as the key support area to watch.
Resistance Levels: 4485.00, 4520.00
Support Levels: 4375.00, 4310.00
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