Gold price edges up as market awaits Fed minutes, Powell speech

[Ben Graham]

Gold edged higher on Wednesday as investors await the minutes of the US Federal Reserve’s last policy meeting and upcoming Jackson Hole symposium for clues on future interest rate moves.

Spot gold advanced 0.8% to $3,341.56 per ounce by 11:40 a.m. ET to erase most of this week’s losses. US gold futures also gained 0.8%, trading at $3,385.20 an ounce in New York.

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Gold surged above the $3,400 level earlier this month after the US central bank decided to hold interest rates steady in July, increasing the odds of a rate cut in September instead. Since then, the metal has gradually pulled back as mixed US economic data came out.

All eyes this week are on the Fed’s July meeting minutes, which are due later this afternoon, followed by Chair Jerome Powell’s speech at the annual Jackson Hole economic symposium on Friday.

“Gold prices fell yesterday, so now traders are looking at it as an opportunity to get into gold ahead of the Fed minutes,” said RJO Futures market strategist Bob Haberkorn.

“If Powell is dovish, it’s bullish for gold, as it does not bear interest. It will need to break through $3,350/oz. and then ultimately retest $3,400/oz. if he’s dovish,” he added.

Traders currently expect an 85% chance of a quarter-point rate cut in September, according to the CME FedWatch tool.

Markets are also watching US efforts toward a landmark meeting between Russian President Vladimir Putin and his Ukrainian counterpart Volodymyr Zelenskiy. Any signs of a ceasefire could ease demand for gold.

Gold has climbed more than a quarter this year, as trade war fears and geopolitical tensions boosted its appeal as a safe asset, while central bank buying and inflows to exchange-traded funds also provided support.

Though it has traded in a relatively tight range since reaching a record at roughly $3,500 in April, banks like UBS and Citigroup expect further gains.

(With files from Bloomberg and Reuters)