Gold Climbs as Dollar-Debasement Fears Persist Ahead of Fed Remarks

Gold prices inched higher on Thursday as concerns over potential US dollar debasement continued to support the precious metal. Spot gold rose 0.6% to $4,618.93 per ounce by 0437 GMT.

The increase follows last week's surge of more than 5%, which was driven by the US Treasury's announcement to expand buybacks of older, long-dated bonds. This move reignited fears about potential dollar debasement, a narrative that is likely to remain supportive of gold in the medium term, according to Kelvin Wong, senior market analyst at OANDA.

Wong noted that the US budget deficit is also contributing to concerns over dollar debasement. A weaker dollar generally makes dollar-denominated metals more affordable for buyers using other currencies. The US dollar was steady on Thursday.

The Federal Reserve's monetary policy direction will be closely watched, particularly after remarks from Chairman Kevin Warsh at the Jackson Hole symposium in Wyoming on Friday. Markets are looking to the speech for greater clarity on how the Fed would respond to the current economic environment.