On Thursday (September 3), spot gold continued its rebound, after falling below $4,300 the previous day to a near four-week low. A sharp strengthening of the yen weighed on the dollar, while falling US Treasury yields provided additional support for precious metals. Spot gold traded around $4,490 during the session, up 2.32% on the day. US Dollar and Treasury Yields The US Dollar Index (DXY), which tracks the dollar's value against a basket of six major currencies, is currently trading around 98.8550, near a one-week low; it touched 99.86 on Wednesday, its highest level since August 14. The benchmark 10-year Treasury yield is around 4.75%, falling for the second consecutive day—it had previously touched 4.81%, its highest level since October 2023. Mixed US Economic Data US economic data delivered mixed signals. Initial jobless claims for the week ending August 29 rose to 206,000, slightly higher than the market expectation of 205,000 and the previous week's 204,000. Meanwhile, the services purchasing managers' index (PMI) rose to 55.4 in August from 54.1 in July, higher than the market expectation of 54.3. Short-Term Headwinds Remain A weaker dollar typically benefits gold. However, while strong central bank gold purchases and investment demand provide support for the long-term outlook, several short-term headwinds may make it difficult for gold to maintain its rebound momentum. Global government bond yields have climbed to multi-year highs, with fiscal and inflation concerns deepening; Middle East conflicts have pushed up oil prices, further raising inflation expectations. Higher yields increase the opportunity cost of holding non-interest-bearing assets such as gold. Fed Actions Expectations of a Fed rate hike pose an additional challenge, as gold typically performs better in low-interest-rate environments. However, dovish comments from Fed Governor Christopher Waller have made traders cautious about the possibility of a September rate hike. Waller stated that he "finally sees some signs of inflation easing in recent data," and that "the September rate decision will depend on the August inflation data." He added that if the August data confirms recent progress, he would support keeping rates unchanged. According to the CME FedWatch tool, the probability of a rate hike at the Fed's September 15-16 meeting has fallen from 63% the previous day to about 48%. Traders are now awaiting Friday's non-farm payrolls (NFP) report for new clues about the Federal Reserve's monetary policy outlook. Technical Analysis: Gold approaches $4,500, buyers regain control. (Spot Gold Daily Chart Source: FX678) The MACD indicator remains below the zero line and in negative territory, suggesting that although spot prices are well above the lower trend support level, bullish momentum is still tentative. The daily RSI indicator is at 55, slightly positive, reinforcing the "consolidation with a bullish bias rather than overbought/overheated" tone. Upside resistance: Initial resistance is at the $4500 level, followed by the 200-day SMA at $4533, and the psychological level of $4700. Downside support: The psychological level of $4400 provides initial support, followed by the 100-day SMA at $4357, and the 50-day SMA at $4231. Further declines will bring the $4000 support level into view.