On August 19, gold experienced a significant selloff during the previous session. After opening near 4436 in the Asian session, prices began to retreat, hovering below the 4400 level before staging another sharp decline during the US session. Gold broke through multiple support levels, ultimately reaching a low of $4,324 per ounce before closing at $4,334, forming a large bearish daily candle.
Wednesday (August 19) saw the direct trigger for gold's decline not rooted in the metal itself, but rather in the upward movement of US Treasury yields. The 10-year Treasury yield approached 4.75%, while the 30-year yield broke above 5.30%, reaching levels not seen since 2007. What does this mean for gold? Higher Treasury yields increase the opportunity cost of holding non-yielding assets like gold, prompting capital to shift toward assets offering better returns.
The Federal Reserve's July meeting minutes represent the true arbiter tonight. The market currently sits with these conditions: July non-farm payrolls at -23,000 (which should have been positive), core CPI at 2.5%, and headline CPI at 3.4% — both trending downward. Logically, this should support a dovish stance and rate cut expectations. However, CME data shows approximately a 70% probability of rates remaining unchanged in September, indicating the Fed's rhetoric remains hawkish.
Tonight's minutes offer two potential scenarios: a hawkish tone would likely push gold toward retesting $4,300, with a break potentially targeting $4,270–$4,220. Conversely, a dovish tone — hinting at rate cuts this year or expressing concern over employment — could trigger short covering, driving prices toward $4,385–$4,435. Before the minutes release, taking hard directional positions is not advisable; this discipline represents the core human challenge today.
From a technical perspective, gold has shown some rebound in early Asian trading. Resistance around $4,380–$4,370 is expected to provide meaningful short-term pressure. If the Asian session fails to reclaim this level, the intraday trend may remain weak. However, considering the US dollar index is also under pressure, any dollar adjustment could expand gold's rebound potential, with key focus on the overnight breakdown zone around $4,385–$4,377.
In summary, today's market resembles the oppressive heat before a storm — surface calm masking major events. Let's trim positions, stay patient, and wait for the 02:00 minutes release. Gold itself will reveal its direction. Until then, avoid premature conclusions.
For intraday operations, the recommendation is: short gold at $4,365–$4,370 with a stop loss at $4,380, targeting $4,300–$4,280, holding on breakout. If prices hold above $4,380, abandon the short position.
Key economic data and events to watch today: Wednesday, August 19, 2026 — at 02:00 the following day, the Federal Reserve releases its monetary policy meeting minutes.
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