Gold Holds Above $4,600 as Markets Await Fed Rate Signals at Jackson Hole
Summary
- Spot gold traded at $4,619.54 an ounce, up about 14% this month.
- More than 28 tons flowed into gold-related ETFs as the US Treasury’s expanded long-term bond buybacks revived the debasement trade.
- Markets are watching Federal Reserve Chair Kevin Warsh’s Jackson Hole speech for clues on the future rate path and the Fed’s view on persistent inflation.
Forecast Trend Report by Period
Gold traded above $4,600 an ounce as investors looked ahead to signals on US monetary policy from this week’s Jackson Hole symposium.
Spot gold rose 0.6% from the previous session to $4,619.54 an ounce as of 7:38 a.m. in Singapore on Aug. 26, according to Bloomberg. The metal’s gain reached as much as 0.7% intraday.
Gold ended a five-session winning streak a day earlier after US inflation data showed prices still running well above the Federal Reserve’s target. That strengthened expectations the Fed could raise interest rates if inflation pressures persist, sending the dollar to its biggest gain in two weeks while Treasury yields also climbed.
Even so, gold is still up about 14% this month. The advance has been supported in part by a revival of the so-called debasement trade after the US Treasury moved last week to expand buybacks of long-term government bonds, fueling concern over the US fiscal burden and the dollar’s value.
Funds have also continued to flow into the gold market. Bullion recently climbed above its 200-day moving average, a closely watched trend indicator. More than 28 tons flowed into spot gold-backed exchange-traded funds tracked by Bloomberg last week, the largest inflow since January.
Markets are now focused on Federal Reserve Chair Kevin Warsh’s speech at Jackson Hole on Aug. 28. As it will be his first major address at the symposium since taking office, investors are looking for clues on the Fed’s view of persistent inflation and the future path of interest rates.
Silver rose 1.3% to $68.99 an ounce, while platinum and palladium also advanced. The Bloomberg Dollar Spot Index fell 0.1% after rising 0.2% a day earlier.
