Gold Futures Breach $3700 But That value Was Not Sustainable

Gold's December futures contract made history today, breaching $3,700 per ounce for the first time. After reaching an intraday high of $3,715, the precious metal reversed course dramatically, closing down $8.00 at $3,669.70 as of 4:30 PM ET.

The morning rally was fueled by growing expectations of Federal Reserve rate cuts, with the CME's FedWatch tool showing probability rising from 89.4% yesterday to 91.7% for a cut at the September 15-16 FOMC meeting. Early dollar weakness provided additional support, pushing gold briefly above the psychologically important $3,700 threshold.

However, the bullish momentum proved short-lived. The dollar index recovered from its morning low of 97.26 to close 0.35% higher at 97.80, pressuring gold prices throughout the afternoon session.

In today's video analysis, we'll examine how this significant price action—gold's historic breach above $3,700, the subsequent retreat, and the bearish close—may signal important directional changes ahead.

However, late in the day Bloomberg reported alarming information that could change the outlook for gold. The report could strengthen bullish market sentiment for gold. 

The Bloomberg article reported that:

The US economy has been worse for American workers than previously thought, according to new data from the federal government. Revised numbers show job growth has been far less robust than reported earlier, the latest in more than a week of almost-daily reports showing the nation’s economic stamina wavering.

The number of workers on payrolls will likely be revised down by 911,000 for the 12 months through March—or almost 76,000 less each month on average—according to the Bureau of Labor Statistics’ preliminary benchmark revision out Tuesday. “The economy is weakening,” JPMorgan Chief Executive Officer Jamie Dimon said on CNBC. “Whether that is on the way to recession or just weakening, I don’t know.”

Wishing you as always, Good Trading,