Dovish Fed Governor Fails to Rally Gold Amid Mixed Market Response

Christopher Waller, a Federal Reserve governor, cut the market's odds of a September rate hike by double digits on Thursday. Despite this dovish tone, gold barely moved in response.

Gold is priced at around $4,488 an ounce, up roughly 2.3% on the day, while silver sits near $67.07, up about 2.7%. According to Waller, holding the federal funds rate at 3.50% to 3.75% when the FOMC meets September 15 and 16 is a viable option, provided that data over the next two weeks shows inflation cooling.

The timing of Waller's statement is crucial, as gold had already risen by 2.4% before his remarks at 9:26 a.m. ET. However, it gave back around $28 by 10:00 a.m., and still trades below its pre-Waller level. This mixed response to the dovish news may be due in part to the fact that gold had already banked a bigger move on something else - President Trump's statement that Wednesday's strike on Iran would not take long, seen as a sign of a brief escalation.