Gold Ends 4-Month Losing Streak Amid Critical Test at $4,000 Mark

International gold markets faced weekly declines driven by a resurgent U.S. Dollar and profit-taking, yet the metal is poised to record its strongest monthly performance since February, potentially ending a four-month losing streak. Amid shadows of uncertainty regarding the Fed's rate path, the precious metal is experiencing a volatile trajectory around the critical threshold of $4,000.

Dollar Rebound Intensifies Pressure on Gold

The recovery in the U.S. Dollar Index on the last trading day of the week created direct selling pressure on gold prices. The strengthening of the dollar made gold more expensive for investors using other currencies, while spot gold saw losses approaching 2% during the day.

■Spot gold ended the day with a 1.5% loss, settling at $4,045.

■August gold futures traded in the U.S. fell by 1.3% to finish at $4,107.

■The U.S. Dollar Index signaled a recovery after its sharpest daily drop in 1.5 years of 2.4% the previous day.

Monthly Gains and Inflation Dynamics Amid Fed Shadows

Despite short-term volatility, gold maintains a positive appearance on the monthly chart. The slowdown in U.S. inflation data in line with expectations and the retreat in oil prices weakened market expectations for new Fed rate hikes. This situation kept safe-haven demand alive, helping gold gain 1.1% in value on a monthly basis and opening the door for its strongest monthly rise since February.

■According to CME FedWatch data, the probability of a rate hike in September fell from 80% to 65% over the last week.

■Messages from Fed Chairman Kevin Warsh indicating that the fight against inflation will not rely solely on rate hikes continue to shape monetary policy expectations.

The Psychological $4,000 Threshold Forms Critical Resistance

Technically, markets are closely watching the $4,000 level. Bybit Chief Market Analyst Han Tan notes that while the precious metal is on its way to ending a four-month losing streak, it struggles to establish sustainable movement above this psychological level. While Warsh's signals regarding monetary policy remain decisive in pricing, closes below or above this level will be trend-setting for investors.

Broad Correction Movement in Precious Metals

Profit-taking in gold spilled over to other precious metals. Silver saw a sharp decline driven by industrial demand and news from China, while platinum and palladium also remained in negative territory.

■Spot Silver (XAG=): Fell 2.1% to $57.76.

■Platinum (XPT=): Declined 0.6% to $1,650.14.

■Palladium (XPD=): Dropped 1.8% to trade at $1,281.18.

From a wealth management perspective, this volatility in gold underscores the importance of portfolio diversification. While the uncertainty in the Fed's rate policy and the strengthening of the dollar may pressure gold in the short term, as long as the structural issues of inflation persist, it is likely that gold will maintain its function as a hedge. Investors should review their stop-loss points at critical technical levels like $4,000 and strategically optimize their asset allocations by balancing return expectations with deposit interest rates.