Gold Steady as Investors Await Warsh's Jackson Hole Speech

Gold was little changed around $4,590 an ounce on Thursday after posting its biggest one-day percentage decline in a week, as investors awaited fresh policy signals from Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium on Friday. Despite slightly hotter US inflation data, concerns over global debt continue to support demand for the precious metal. Gold reached a more than three-month high earlier this week, with the latest rally fueled by renewed concerns over dollar debasement following the US Treasury's decision to increase buybacks of older, long-dated bonds. Investors are looking to Warsh's debut Jackson Hole speech for clues on the Fed's approach to bringing inflation back to target. Data on Wednesday showed the PCE price index rose 3.7% year-on-year in July, slightly above expectations. Markets now see a 38% chance of a September rate hike, while the probability of a hike by December remains above 70%, according to the CME FedWatch Tool.

Gold traded around $4,600 an ounce on Thursday after declining in the previous session, as investors continued to weigh the outlook for Federal Reserve monetary policy ahead of a key meeting next month. Data released Wednesday showed US PCE prices rose more than expected in July and remained well above the Fed’s target, supporting a bullish outlook on interest rates. Investors now turn to Fed Chair Kevin Warsh’s speech at the annual Jackson Hole symposium on Friday, although he is not expected to offer clear guidance on the central bank’s September policy decision. Meanwhile, gold hovered near its highest level in three months as the so-called debasement trade continued to provide support, with investors hedging against risks of a US debt crisis and a weaker dollar. Elsewhere, China’s net gold imports through Hong Kong rose around 11% month-over-month in July, supported by stronger investment demand.

Gold prices fell toward $4,600 an ounce on Wednesday, on track to snap a three-session winning streak, as investors assessed fresh US economic data for clues on the Federal Reserve’s interest-rate path. The PCE price index rose 0.2% in July, above expectations for a 0.1% increase, while annual inflation reached 3.7% versus forecasts of 3.6%. Core PCE rose 0.2% month-over-month and 3.3% year-over-year, both in line with expectations. Consumer spending and income also came in slightly above forecasts. Separate data showed US GDP grew 1.5% in Q2, in line with the initial estimate, while durable goods orders rose 1.1% in July, beating expectations of 0.5%. Markets are now pricing around a 60% chance of the Fed leaving rates unchanged next month, down from 64% before the data, according to the CME FedWatch Tool. On the geopolitical front, Iran said it had resumed talks with neighboring Oman on managing the Strait of Hormuz, amid mounting economic pressure from US President Donald Trump.