Gold prices rebound after hitting lows as market focuses on geopolitical situation and this week's series of economic data

1. During Monday’s Asian morning session, spot gold rebounded after dipping to around $4,435, hitting a new one-week low. It has since risen back to around $4,460 per ounce. In the previous trading day, gold prices plunged over 3% following hawkish rate hike signals from Federal Reserve Chair Waller. After such a sharp short-term drop, the market is seeking a period of volatile adjustment.2. Federal Reserve Chair Waller stated at the Jackson Hole seminar last Friday that if policymakers cannot gain sufficient confidence that inflation is moving toward the 2% target, the Fed “still has work to do.” This was his closest admission yet that rate hikes may be needed to ease price pressures. According to CME Group’s FedWatch tool, the probability of a September rate hike has climbed to 57%, significantly higher than the 36% before his speech.3. Rising interest rates typically reduce the appeal of non-yielding assets like gold. This week, the market is expecting a series of U.S. employment reports, including job vacancies, ADP employment data, initial jobless claims, and Friday’s nonfarm payrolls report. These data releases may provide further guidance for the Fed’s policy course.4. On the geopolitical front, Iran on Friday condemned new U.S. economic sanctions as “state terrorism,” while Iran’s Supreme Leader declared a ban on any behavior that could harm “social cohesion.” Geopolitical risks continue to offer some support to gold prices. However, oil prices have risen as a result, heightening inflation concerns and bolstering expectations of additional Fed rate hikes, which might outweigh safe-haven demand for gold.5. A U.S. official said that on Sunday, the U.S. military struck two Iranian missile launch sites on Iran’s Larak Island. This marked the first U.S. strike against Iran since late July.6. According to Fox News reporters citing U.S. sources on Sunday, Iran then attacked U.S. forces stationed in Jordan. The reporter posted on the X platform that almost all incoming missiles “have been intercepted,” and noted that, so far, there has been no significant impact.