Gold drops ahead of Fed chief Warsh’s Jackson Hole speech
Spot gold falls 0.5% to $4,580.19 per ounce
Gold prices declined on Friday as investors awaited Federal Reserve Chair Kevin Warsh's remarks at the Jackson Hole symposium. Spot gold dropped 0.5% to $4,580.19 per ounce at 0438 GMT, falling from a three-month high of $4,696.18 on Tuesday. US gold futures also eased 0.7% to $4,632.40. Analyst Matt Simpson of StoneX suggested that if Warsh appears hawkish, gold could further retreat from its cycle highs, but bulls who missed the initial rally may be eager to see gold return to $5,000.
Fed officials expressed concerns about U.S. inflation at their gathering in Jackson Hole, following data showing the Personal Consumption Expenditures price index at 3.7% for the 12 months ending in July. Warsh is set to speak later in the day. Traders anticipate a 33.7% chance of a U.S. rate hike in September and a 74.2% chance by December, according to the CME FedWatch tool.
Despite gold's role as an inflation hedge, it often loses appeal in high-interest environments since it does not yield any income. Recent support for gold includes improved participation in exchange-traded funds and futures and ongoing official-sector buying. However, risks of consolidation persist. Silver and palladium also experienced declines, with silver falling 0.6% to $68.85 per ounce and palladium dropping 0.2% to $1,349.44. Platinum saw a 0.3% decline to $1,840.78, on track for a weekly loss.
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