Gold edges higher as markets weigh Warsh's inflation message after Fed decision
- Spot gold was up 0.4% at $4,080.38 per ounce
Gold prices increased as markets processed the Federal Reserve's decision to keep interest rates unchanged while reiterating its commitment to controlling inflation, creating market uncertainty.
- Federal Reserve's unchanged interest rates and inflation commitment.
- Market's revised expectations for a September rate hike.
- Geopolitical tensions in the Middle East.
Gold prices edged higher on Thursday, as markets assessed comments from US Federal Reserve Chairman Kevin Warsh on tackling inflation after the central bank left interest rates unchanged at its latest policy meeting.
Spot gold was up 0.4% at $4,080.38 per ounce, as of 0103 GMT.
US gold futures for August delivery gained 1.1% to $4,078.
A divided Federal Reserve left interest rates unchanged on Wednesday, while Warsh reaffirmed the US central bank’s commitment to bringing inflation under control, leaving markets uncertain about its next policy move.
Markets are now pricing in a 57% chance of a rate hike in September, down from about 81% prior to the policy statement, according to CME Group’s FedWatch tool.
Investors are also awaiting June’s Personal Consumption Expenditures (PCE) data, due later in the day, for further clues on the Fed’s policy path.
The Bank of England and the Bank of Japan are also widely expected to keep rates unchanged this week and caution against inflationary pressures linked to the Middle East war.
US strikes Iran as widening war engulfs more countries
A drone hit a US-owned gas storage tanker at Egypt’s Mediterranean port of Damietta, British maritime security firm Ambrey said in an initial assessment on Wednesday, and US President Donald Trump vowed to retaliate against Iran for an overnight attack, as the Middle East conflict appeared to expand beyond its main fronts.
Spot silver gained 1% to $58.20 per ounce, platinum inched 0.3% higher to $1,616.84, and palladium rose 1.9% to $1,270.50.