The latest precious metals rally has sharply reversed after Federal Reserve Chair Kevin Warsh used his Jackson Hole speech to signal that inflation remains well above the central bank's 2% target and that there is little urgency to ease monetary policy. The hawkish tone pushed Treasury yields and the U.S. dollar higher, creating a difficult environment for non-yielding assets such as silver and gold.
In silver, an attempted breakout above the 200-day moving average drove prices to $72.05, but the move quickly failed. Analyst LBoard described the reversal as a classic bull trap, with silver retreating toward $67.80. He argued that a deeper technical correction toward approximately $62.70 cannot be ruled out before the larger uptrend resumes. LBoard still views the decline as a necessary breakout-and-retest sequence rather than a failed breakout, provided former resistance becomes support in the $62.70-$65 area.
Warsh noted that PCE inflation has been running near 3.7% over the past 12 months, while business investment, AI-related capital expenditure, consumer spending, and employment remain resilient. Those conditions, he suggested, reduce the case for rapid rate cuts and leave room for the Federal Reserve to stay restrictive for longer.
Gold was hit even more visibly on the weekly timeframe. Prices traded in a range of $4,445 to $4,630 on Friday, producing a large bearish candle and closing back below key technical reference points. Analyst CyclesFan questioned the previous $4,890 rally target after gold dropped below its 200-day moving average. SIRRILLAH mapped lower-timeframe resistance near $4,520-$4,570 and flagged sell-side liquidity around $4,200-$4,220. Alok Jain said Warsh's message hurt near-term gold sentiment and identified $4,700 as the level needed to revive a bullish trend, possibly around October.
Looking ahead, immediate gold support sits at $4,445-$4,450, with a daily close below that exposing $4,400 and then $4,320-$4,350. Resistance begins at $4,500-$4,520, followed by $4,560-$4,600 and $4,675-$4,700. Upcoming U.S. ISM, JOLTS, ADP payrolls, and nonfarm payrolls data may determine whether yields continue to climb or the metals stage a technical recovery. For crypto markets, the same macro backdrop is likely to keep pressure on risk assets, with Bitcoin particularly sensitive to shifts in Federal Reserve policy expectations.
