Gold Prices Rise Amid Dollar-Debasement Fears and Fed Anticipation

Gold prices rose on Thursday due to lingering dollar-debasement fears and concerns about the US budget deficit. Spot gold reached $4,611.16 per ounce, a 0.4% increase from the previous day, while US gold futures rose 0.3% to $4,664.50.

Kelvin Wong, a senior market analyst at OANDA, stated that the dollar-debasement narrative and budget deficit concerns remain supportive of gold in the medium term. Gold prices surged over 5% last week after the US Treasury's move to expand buybacks of older long-dated bonds.

The markets are waiting for highly anticipated remarks from US Federal Reserve Chair Kevin Warsh at the annual Jackson Hole symposium on Friday, which will provide further direction on how the Fed will navigate the current economic landscape. According to Wong, if Warsh does not provide specific forward-looking monetary policy guidance, current market pricing for rate hikes is likely to remain largely unchanged.

The CME FedWatch Tool shows a 36.1% probability of a September US rate hike and a 72.1% chance by December, which may intensify the central bank's debate over whether rates should be lifted or held steady.