Warsh's Jackson Hole Speech Sends Gold Prices Lower
Gold prices slipped on Friday ahead of Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole symposium, where market participants are closely watching his remarks. US gold futures eased 0.7% to $4,632.40.
Spot gold fell 0.5% to $4,580.19 per ounce by 0438 GMT. It touched a more than three-month high of $4,696.18 on Tuesday following the US Treasury's announcement of support measures for long-duration bonds.
Matt Simpson, senior analyst at StoneX, said that Warsh leaning hawkish could see gold retreat further from its cycle highs in the near term, but any dip may be viewed favourably by bulls who missed out on the first phase of the rally. They may be keen to have another crack at $5,000.
Despite gold's role as an inflation hedge, it tends to lose appeal in a high-interest rate environment as it offers no yield. However, gold remains supported by improving participation in exchange-traded funds and futures, along with concerns over US fiscal credibility and continued official-sector buying.