Gold consolidates above US$4,600 as investors weigh Fed rate path

Gold prices stabilized above $4,600 an ounce as investors considered the Federal Reserve's stance on persistent inflation ahead of the annual Jackson Hole gathering. The precious metal climbed up to 0.7 percent, recovering some of its losses from the previous day. This came after a report revealed that US inflation remained significantly higher than the Fed's target, which increased the probability of a rate hike from the central bank.

The US dollar experienced its most substantial gain in two weeks, and bond yields also rose following the data release. Despite these factors, gold has increased by approximately 14 percent in August, spurred by the US Treasury's unexpected intervention in the bond market the previous week. The intervention has reignited interest in the "debasement trade," contributing to the record-breaking rally in gold throughout 2025.

Gold's recent resurgence has also pushed the metal above the 200-day moving average, a commonly used indicator of momentum. This development has attracted broader investor participation, with gold-backed exchange-traded funds tracking Bloomberg adding over 28 tonnes last week, the highest level since January. Investors will be eagerly anticipating clues about the Fed's approach to inflation during Kevin Warsh's inaugural major speech as the central bank's chairman, scheduled for Friday at the Jackson Hole symposium.

The highly-anticipated address provides Warsh with an opportunity to clarify his economic views and respond to criticism regarding his transparency about the economy's outlook. Gold climbed 0.6 percent to $4,619.54 an ounce at 7:38 am in Singapore. Silver increased by 1.3 percent to $68.99 an ounce, while platinum and palladium also rose.

The Bloomberg Dollar Spot Index, which measures the greenback, declined by 0.1 percent after ending the previous session 0.2 percent higher.