Gold prices moved lower during early U.S. trading on Thursday after stronger-than-expected economic data reduced expectations that Treasury yields would continue to decline.

At the time of writing, spot gold was trading around $4,454.70 per ounce, down 1.51%, while silver remained relatively strong, gaining about 4.87% to $66.67 per ounce.

Stronger U.S. Data Puts Pressure on Gold

U.S. initial jobless claims fell to 206,000, below expectations of 210,000.

Meanwhile, the Philadelphia Fed Manufacturing Index rose sharply to 47.4 in August, up from 41.4 in July and well above the forecast of 24.1.

The data suggest that the U.S. labor market and manufacturing sector remain relatively resilient, reinforcing the possibility that the Federal Reserve may stay cautious on inflation.

Minutes from the Fed’s latest meeting also showed that several policymakers were prepared to support higher interest rates if inflation fails to continue easing.

Gold Retests the Breakout Zone

Gold surged strongly on Wednesday, breaking above $4,447 and then pushing through the $4,500 per ounce level as long-term Treasury yields declined.

However, after the stronger U.S. data, prices pulled back toward the previous breakout zone around $4,447.

This makes the current area an important technical level for determining whether the recent breakout can hold.

Elevated Oil Prices Continue to Support Defensive Demand

Tensions surrounding the Strait of Hormuz remain an important factor for gold.

Brent crude was trading around $93.90 per barrel, while WTI stood near $86.72 per barrel.

Higher energy prices create two opposing forces for gold:

• Geopolitical uncertainty supports safe-haven demand.

• Higher oil prices increase inflation risks, making it harder for Treasury yields to fall significantly.

As a result, gold is currently caught between defensive demand and pressure from interest-rate expectations.

Key Technical Levels to Watch

From a technical perspective, the main levels for gold are:

Resistance:

• $4,595

• $4,778

Support:

• $4,447

• $4,320

• $4,228

If gold holds above $4,447, the recent breakout structure may remain intact.

On the other hand, a sustained break below this level could increase the risk of a deeper correction.

Conclusion

Gold is pulling back after its strong move above $4,500, as firmer U.S. economic data reduced expectations for a more favorable interest-rate environment for precious metals.

In the near term, $4,447 will be a key technical level to watch. Investors should also closely monitor U.S. Treasury yields, economic data, oil prices, and Federal Reserve policy signals for clues about gold’s next direction.

Source: Kitco