Gold Price Stabilizes Near $4,600 as Market Awaits Jackson Hole Clarity

The gold price held steady near $4,600 as the market digested higher-than-expected U.S. PCE data for July. The price index rose 0.2% month-over-month and 3.7% year-over-year, exceeding expectations.

Following the release of the data, the probability of a September Fed rate hike increased to around 40%, according to the CME FedWatch Tool. However, gold did not decline further, suggesting that market participants are waiting for clarification on the policy direction from Federal Reserve Chair Kevin Warsh's speech at Jackson Hole this Friday.

Warsh's speech is crucial in determining short-term gold price movements. If he emphasizes the need for a rate hike due to sticky inflation, U.S. Treasury yields and the dollar could rise, putting pressure on gold. Conversely, if he focuses on economic growth risks while avoiding explicit support for a September rate hike, the current rate hike probability may decline, and gold could mount another charge toward $4,700.