Warsh Speech Set to Spark Gold Price Volatility
Gold prices have surpassed $4,600 for the first time since May, while silver remains near $69. Despite this, market attention is focused on Friday's speech by Fed Chair Kevin Warsh at the Jackson Hole symposium.
The Treasury yield has fallen again, with the 10-year yield slipping to 4.71% and the 30-year easing to 5.25%. This decline in yields reduces the opportunity cost of holding gold, which pays no interest, leading to a decrease in its price.
Warsh's speech on Friday is expected to carry significant weight, as he has no policy track record yet. Markets are positioning themselves ahead of the event, with traders unwinding some of last week's yield increase.
The dollar index sits near 98.8, a three-month low, which is seen as a major driver behind this month's metals rally. A softer dollar lowers the local-currency cost of gold for overseas buyers, widening demand without changing the metal's fundamentals.