Gold Price Pulls Back Ahead of Warsh's Jackson Hole Debut
The gold price is taking a breather after surging to three-month highs earlier this week. As of early Friday, it's trading below $4,600. Traders are awaiting the annual Jackson Hole Symposium, where Federal Reserve Chairman Kevin Warsh will speak for the first time.
Warsh's words could give us hints about whether an interest rate hike remains a possibility at the Fed's September 16-17 monetary policy meeting. Despite hot US core Personal Consumption Expenditures (PCE) Price Index data for July, the market keeps pricing in a roughly 65% probability that the Fed will keep rates on hold next month.
TD Securities notes that commodity traders remain comfortable with their long positions in gold heading into Jackson Hole, and that a more hawkish tone from Warsh would be a catalyst for some reversal in the yellow metal. However, they argue that 'the bar is likely high to reverse the improved sentiment in precious metals.'