Gold Edges Higher on Uncertainty Over US Federal Reserve Policy

Gold prices edged higher on Thursday after US Federal Reserve Chairman Kevin Warsh reaffirmed the central bank's commitment to bringing inflation under control. Despite leaving interest rates unchanged, the markets were uncertain about the Fed's next policy move.

The price of spot gold rose by 0.3% to $4,076.29 per ounce, while US gold futures for August delivery gained 1% to $4,073.60. This increase was seen as a response to Warsh's comments on tackling inflation, which were perceived as lacking urgency.

Marex analyst Edward Meir said that the markets were 'surprised and somewhat disappointed' by Warsh's approach, stating that gold prices had risen due to its appeal as an inflation hedge. However, analysts at TD Securities predicted that gold is unlikely to sustain these gains for an extended period, forecasting a price drop to around $3,900 per ounce.

The uncertainty surrounding the Fed's next policy move was also reflected in oil prices, which gave up some of their gains on Thursday. Investors are awaiting June's US Personal Consumption Expenditure (PCE) data and the ongoing geopolitical tensions between the US and Iran.