NEW YORK: Gold prices were little changed on Friday as investors held off on making large bets ahead of Federal Reserve Chair Kevin Warsh’s speech at the Jackson Hole symposium, seeking clues on the central bank’s policy path.
Spot gold was down 0.02percent at USD4,600.07 per ounce by 1302 GMT. It had hit a more than three-month high of USD4,696.18 on Tuesday, following the US Treasury’s announcement of support measures for long-duration bonds.
US gold futures for December delivery fell 0.3percent to USD4,642.90. “Basically ahead of Kevin Warsh’s remarks, traders are not willing to build any large positions, which kind of explains why markets haven’t really moved that much in recent times,” said Fawad Razaqzada, a market analyst at Forex.com.
Fed officials shared their concerns about the US inflation landscape on Thursday, as central bankers gathered in Jackson Hole. Kansas City Fed President Jeffrey Schmid and Cleveland Fed President Beth Hammack reiterated that interest rates may need to rise to curb inflation. Their comments came a day after data showed the Personal Consumption Expenditures Price Index, a key inflation gauge for the central bank, stood at 3.7percent in the 12 months through July.
Traders see a 36percent chance of a US rate hike in September, according to the CME FedWatch tool. Warsh is scheduled to speak at around 1400 GMT. Gold tends to lose appeal in a high interest rate environment as it offers no yield.
“To me, it looks like investors are trying to move away from the US dollar and look for alternative currencies or currencies where there’s a better fiscal discipline than the US… if we can get parts up USD4,600 area where we have seen a bit of a struggle this week, then from there, gold could easily climb back towards that USD5,000 level,” Razaqzada said.
Gold discounts in India, however, plunged this week, as demand fell sharply on market speculation that the government could consider rolling back a recent hike in import duties.
Spot silver rose 2.02percent to USD70.65 per ounce, platinum was up 2percent at USD1,882.70 and palladium gained 6.2percent to USD1,434.25 an ounce, with all three on track to post weekly gains.