Gold hits over 3-month high ahead of US inflation data and Fed chair speech
Gold has stepped back into bid mode and is taking its cues primarily from the softer US dollar
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GOLD prices hit their highest level in more than three months on Monday (Aug 24) as a subdued US dollar lent support, while focus shifted to key US inflation data and a speech later on Friday by US Federal Reserve chair Kevin Warsh.
Spot gold was up 0.9 per cent at US$4,643.63 per ounce, as of 0644 GMT, the highest level since mid May. Prices gained more than 5 per cent last week.
US gold futures edged 0.4 per cent higher to US$4,699.10.
A wavering US dollar teetered near multi-month lows in a market unsettled by the US Treasury’s promise to buy back more long bonds. A weaker US dollar makes greenback-priced bullion more affordable for holders of other currencies.
Gold is looking sprightly to start the week and has stepped back into bid mode and is taking its cues primarily from the softer US dollar and focusing on what higher yields may be signalling about underlying economic strains and policy uncertainty, said Tim Waterer, chief market analyst at KCM Trade.
The July Personal Consumption Expenditures price index data and US Fed chair Warsh’s speech at the Jackson Hole symposium on Friday will be watched for fresh clues on the US interest rate outlook.
“Traders will be listening closely for any shift in tone on the policy path and how it sits with recent bond market developments. A balanced or cautious tone that leaves room for flexibility would likely keep the door open for gold to extend its gains,” Waterer said.
On the geopolitical front, the US threatened Iran with what it called “the greatest financial offensive ever marshalled” as it prepared to roll out economic sanctions that target Iran’s trade partners. Oil prices slipped more than US$1 a barrel as investors took profits ahead of the expected announcement.
Among other metals, spot silver added 0.1 per cent at US$69.03 per ounce. Platinum rose 0.5 per cent to US$1,887.28, while palladium gained 0.3 per cent at US$1,353.34. REUTERS
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