• Prices fell below $1,900 an ounce last week in International Spot markets for the first time since June, and are down about 8% from a May peak. Gold’s sharp decline began a month ago when the bears once again prevented the metal from consolidating above $1980, a critical resistance level since May.
• A crucial fundamental factor putting pressure on gold is the rise in government bond yields in developed countries since last month with falling inflation. It is becoming increasingly difficult for gold to compete on yield.
• Speculation also persists after a robust US jobs report last week suggests that a resilient economy is making employers reluctant to reduce headcount. Fed Minutes released also showed officials were still concerned that inflation could fail to recede and more rate hikes might be needed. 
• Elsewhere, data showed that Japan’s core inflation rate slowed as expected in July but remained above the Bank of Japan’s target for the 16th straight month. Investors also monitored China’s real estate sector after top developer Evergrande filed for protection from creditors in a US bankruptcy court.
• Holding at the world’s largest ETF, SPDR Gold Trust fell to below 900 MT for the first time since Feb 2020 as outflows continued in same.
• Traders see an 89 % chance of the Fed holding rates at current levels at its September meeting, according to the CME Fed funds tool, but the chances of a rate hike in the October Meeting have improved to 45 % currently from 30 % over a week ago.

What Lies Ahead? – Gold might witness short covering moves ahead of the Jackson Hole symposium. Volatility is here to stay as overall bias may remain negative.

• Spot Gold is expected to remain volatile this week as signs of local oversold conditions may suggest a bounce, while bias may turn negative later in the week as supports persist in the $1870-1850 per ounce area in Spot.
• Historically, the August-September period ushered in the annual high, or the annual low, in each of the past eight years after gold stocks formed a significant bottom in August-September 2015. Once Phase.  Subsequently, the August-September period marked a high for the year in 2016 and 2017, the low for the year in 2018, the high for the year in 2019 and 2020, and the low for the year in 2021 and 2022.
• Seasonally, gold has a strong period in the second half of August attributed to physical demand. Over the last 15 years, gold has risen 73% of the time between August 16 and September 2. Heading into this morning, December Gold has been down 12 of the 13 August sessions which indicates probably we might enter a highly volatile period in the next few weeks.
• Overall markets could trade with cautious upside ahead of the same event. We believe, the US Fed chief to remain hawkish considering resilient signs in US Economy and sticky inflation. However, if it gives hints of a rate cut as early as the first half of 2024 could lead to high volatility, especially in Gold post-event.