Gold edges down on stronger dollar, Powell’s remarks in focus

Gold prices edged lower on Friday on a stronger dollar while investors awaited U.S. Federal Reserve Chair Jerome Powell’s speech at the annual Jackson Hole symposium that could offer fresh clues on the monetary policy path.

Spot gold edged down 0.2% to $3,333.01 per ounce by 0353 GMT. U.S. gold futures for December delivery fell 0.2% to $3,376.

The U.S. dollar index hovered near a two-week high, making gold less attractive to overseas buyers.

Fed officials appeared lukewarm on Thursday to the idea of a rate cut next month as investors geared up for Powell’s speech, due at 1400 GMT on Friday.

“With a Russia-Ukraine peace deal still a possibility, and the USD attracting some buyers, gold is facing headwinds,” KCM Trade chief market analyst Tim Waterer said.

“But if Powell’s message is interpreted as being a dovish shift, the USD could be undone, and gold may be on the move higher again.”

Futures markets indicate a 75% chance of a quarter-point rate reduction next month, according to CME’s FedWatch tool.

Recent labour data showed U.S. jobless claims rose last week by the most in nearly three months, while unemployment claims the previous week hit a near four-year high.

The challenge for Fed policymakers is that even as there have been signs of labour market weakening, inflation remains above the central bank’s 2% target and could well go higher due to the Trump administration’s aggressive hiking of tariffs on imports.

Russian President Vladimir Putin is demanding that Ukraine give up all of the eastern Donbas region, renounce ambitions to join NATO, remain neutral and keep Western troops out of the country, three sources familiar with top-level Kremlin thinking told Reuters.

Elsewhere, spot silver was down 0.2% to $38.08 per ounce, platinum fell 0.9% to $1,341.46, and palladium rose 0.2% to $1,112.92.