Gold slips as US Fed chair’s Jackson Hole speech looms
The case for Warsh to lean hawkish is greater than the case for him not to
Gold experienced a slight decline on Friday, Aug 28, as traders awaited remarks from Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium. The precious metal dropped by 0.5% to $4,580.19 per ounce, marking a more than three-month high of $4,696.18 earlier in the week, following the US Treasury's announcement of support measures for long-duration bonds.
US gold futures also saw a 0.7% decrease to $4,632.40. Analyst Matt Simpson from StoneX believes that Warsh's hawkish stance could prompt further gold declines, although he anticipates bulls who missed the initial rally might welcome another opportunity to reach the $5,000 mark. Federal Reserve officials expressed concerns about inflation during their gathering in Jackson Hole, Wyoming, just a day after a report revealed the Personal Consumption Expenditures Price Index at 3.7% for the year ending July.
While securing a hedge against inflation, gold tends to lose appeal when interest rates are high, as it doesn't yield income. OCBC precious metals strategist Christopher Wong noted that gold's support comes from increased exchange-traded fund and futures participation, along with worries about US fiscal credibility and official-sector buying.
Silver and palladium also faced declines, with silver falling 0.6% to $68.85 per ounce and palladium dropping 0.2% to $1,349.44. Platinum experienced a 0.3% decrease at $1,840.78, on track for another weekly loss.
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