Gold Prices Slip as Investors Await Warsh's Remarks at Jackson Hole
Gold prices slipped on Friday as investors awaited Federal Reserve Chair Kevin Warsh's remarks at the Jackson Hole symposium. The US Treasury's recent support measures for long-duration bonds had pushed gold to a more than three-month high earlier this week, but the metal fell 0.5% to $4,576.30 per ounce by 0157 GMT.
US gold futures eased 0.8% to $4,629. Matt Simpson, senior analyst at StoneX, noted that the case for a hawkish stance from Warsh appeared stronger, which could push gold lower from its recent highs in the near term. However, he pointed out that any decline could attract buyers who had missed the initial rally and were targeting the $5,000 level.
The recent warnings from Fed officials over inflation added to pressure on the precious metal. The Personal Consumption Expenditures price index, the Fed's preferred inflation gauge, stood at 3.7% in the 12 months through July. Warsh is scheduled to address the symposium later on Friday, and traders now see a 33.9% probability of a US rate hike in September and a 74% chance of an increase by December.
Higher interest rates generally weigh on gold because the non-yielding asset becomes less attractive compared with interest-bearing investments. However, gold continues to receive support from stronger participation in exchange-traded funds and futures, concerns over US fiscal credibility, and continued buying by official institutions.