Hesitant rise for gold in Powell’s shadow

Gold took advantage of a weaker dollar to move higher today but with contained gains as investors remain cautious until they hear what Chairman Powell has to say about the Fed’s moves tomorrow in Jackson Hole.

In particular, the December gold contract ended trading today at $1,771.4 an ounce having gained $9.90 or 0.6%.

Even with small gains, however, the precious metal completed three consecutive profitable sessions, although concerns about the path it may take in the near term remain.

“Gold has seen a corrective rebound from recent selling pressure. The dollar has retreated from its highs and there is some positioning ahead of the Powell speech,” notes Jim Wyckoff, senior analyst at Kitco Metals.

According to him however, “in the short term, gold charts are still bearish. But in the long term there is still upside potential for gold, as there will be demand for a safe-haven investment whenever the economy falters.”

Elsewhere, investors have turned their attention to a speech by US central banker Jay Powell tomorrow in Jackson Hole, Wyoming where the Fed’s annual conference is being held, awaiting some indication of the bank’s intentions on rate hikes her.

Interest rates tend to work competitively against gold, which does not offer a steady return, and the more the Fed raises them to tame runaway inflation, the more pressure the precious metal will feel.

Metals were otherwise up today, with silver up about 1.1% to $19.12 an ounce.

Palladium continued its rally with a fresh jump of more than 5.6% to $2,139 an ounce, platinum rose slightly by 0.8% to $873.9 an ounce, while copper rose 1.5% closing at $3.699 a pound.