Hold on for gold

Gold was largely unchanged in today’s trading as investors indicated they will wait for some indication of the Fed’s intentions in President Powell’s speech on Friday before deciding how to proceed.

Against this backdrop, the gold contract for December delivery settled at $1,761.5 an ounce, gaining just 30 cents, or 0.02%.

Elsewhere, metals trends were mixed, with silver losing 0.6% to close at $18.907 an ounce, while palladium posted a strong 2.7% gain to $2,025 an ounce.

Platinum came under pressure to settle at $866.8 an ounce, down 1.1%, as did copper, which fell 1.4% to $3.644 a pound.

According to analysts, a recovering dollar and rising US government bond yields are putting pressure on gold, although Kinesis Money’s Rupert Rowling sees stabilizing trends.

“Gold is showing some interesting signs of recovery, or at least stabilization, despite the excellent performance of the dollar and the fact that 10-year bond yields are still above 3%,” Rowling wrote in a note today.

In any case, investors are awaiting fresh indications of the Federal Reserve’s intentions in a speech by its chairman Jay Powell at the economic symposium in Jackson Hole, Wyoming.

“If Powell’s comments send bets toward more Fed rate hikes, that could lead to more losses in stocks and gold, while the dollar continues to dominate the (currency) universe,” he said. Han Tan, analyst at Exinity Group.

However, “if Powell turns out to be more dovish than has been expected, perhaps taking a more dovish tone on the US outlook, that could confirm the narrative that the Fed will shift away from big rate hikes and potentially allow in risk assets to continue their summer rally,” he adds.