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Gold Forecast: Is the US Dollar Debasement Trade Dead?

By :   Matt Weller CFA, CMT , Head of Market Research
August 31, 2026 6:55 PM

Gold Key Points

  • Traders immediately repriced their expectations for the September FOMC meeting after Warsh’s Jackson Hole speech, boosting their perceived odds of an interest rate hike to 60%
  • Warsh’s comments took the wind out of the US dollar debasement trade that had boosted scarce assets like gold and bitcoin consistently throughout the first three weeks of August.
  • For gold, a confirmed break below $4410 would expose $4320 and $4230 support next, whereas a bounce from here could start to unwind last week’s drop.

FOMC Chairman Kevin Warsh got the memo for his Jackson Hole speech on Friday. With markets starting to fear that his aloofness and lack of communication was starting to degrade the central bank’s credibility, the famously anti-forward guidance Warsh confessed that the central bank would have “work to do” if inflation didn’t abate soon and that he “would be hard pressed to describe broad financial conditions as restrictive.”

Traders immediately repriced their expectations for the September FOMC meeting, boosting their perceived odds of an interest rate hike to 60% from as low as 30% before the speech:

Source: CME FedWatch

Of course, actions speak louder than words, and it remains to be seen whether Warsh will back up his hawkish rhetoric with action (voting in favor of an interest rate hike ahead of the midterm elections). In any event, Warsh’s comments took the wind out of the US dollar debasement trade that had boosted scarce assets like gold and bitcoin consistently throughout the first three weeks of August.

Whether that trade revives in the coming weeks or not depends on whether the Fed can convince traders that it will deliver an interest rate hike if needed. Accordingly, Warsh’s Jackson Hole speech raises the stakes for the final two top-tier US economic reports ahead of the September 15 FOMC meeting: Friday’s NFP report and next Friday’s US CPI reading.

Gold Technical Analysis: XAU/USD Daily Chart

 

Source: Tradingview, StoneX

Looking to the chart, Gold has pulled back as much as -6% from last week’s highs near $4700 to test the 38.2% Fibonacci retracement of the summer rally near $4410. This is also where the 100-day MA sits, marking a key technical confluence for traders to monitor this week.

A confirmed break below $4410 would expose $4320 and $4230 support next, whereas a bounce from here could start to unwind last week’s drop, with potential for an extension back toward $4700 if upcoming US economic data comes in below expectations.

-- Written by Matt Weller, Global Head of Research

Check out Matt’s Daily Market Update videos on YouTube and be sure to follow Matt on Twitter: @MWellerFX

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