Gold rises 0.8% to $4,630 as investors await Fed chief Warsh speech
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Spot gold rose 0.8% to $4,630.09 an ounce on Thursday as investors awaited Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole symposium. U.S. gold futures gained 0.7% to $4,685.50.
Key Facts
- Spot gold rose 0.8% to $4,630.09 per ounce on Thursday.
- U.S. gold futures added 0.7% to reach $4,685.50 per ounce.
- Silver gained 1.7% to $69.28 per ounce, platinum rose 1.1% to $1,848.57, and palladium added 0.5% to $1,334.49.
- CME FedWatch data showed a 36.5% probability of a U.S. rate hike in September and 72.7% by December.
- U.S. annual consumer price growth in July unexpectedly held steady and remained well above the Fed's 2% target.
Market Drivers
OANDA senior market analyst Kelvin Wong said the dollar-debasement narrative combined with concerns over the U.S. budget deficit continues to support gold in the medium term. Gold rose more than 5% last week after the U.S. Treasury Department's decision to increase purchases of long-term bonds. That decision heightened investor concerns about potential dollar weakness and supported demand for the precious metal as a safe-haven asset. High interest rates traditionally pressure gold because the metal yields no interest, while rising economic and geopolitical risks increase its appeal as a protective asset.
Fed Policy Outlook
Investors now focus on Warsh's speech at the annual Jackson Hole symposium for guidance on the Fed's policy path and interest rate outlook. Wong said if the central bank chief gives no concrete signals on monetary policy, current market rate expectations may not change significantly. Data released Wednesday showed U.S. annual consumer price growth in July unexpectedly held steady and remained well above the Fed's 2% target. The personal consumption expenditures price index rose 0.2% month-on-month and 3.7% year-on-year, according to the data.
Geopolitical Context
Market attention also focused on Iran as Qatar's prime minister planned to visit Tehran to resume diplomatic talks. The visit follows an exchange of accusations between the United States and Iran amid Washington's threats to increase economic pressure on Tehran.
3 sources
Gold rises 0.8% to $4,630 as investors await Fed chief Warsh speech
