Gold Down, Expectations Lower
Gold edged lower as traders scaled back bets on an interest rate cut ahead of the Federal Reserve's Jackson Hole symposium, as strong U.S. manufacturing data added to policymakers' concerns about inflation.
Bullion prices traded around $3,330 an ounce in London, barely changed since the start of the week. A manufacturing activity indicator on Thursday showed that factories expanded at the fastest rate in more than three years due to stronger demand. Currency markets now price in about a 73% chance of a rate cut next month, down from over 90% a week ago.
Fed Chairman Jerome Powell is scheduled to speak at 10:00 a.m. New York time Friday at the Wyoming symposium. Ahead of his speech, which will be closely watched for clues about the central bank's monetary path, Cleveland Fed Bank President Beth Hammack said she would not support a rate cut if a decision were made tomorrow. Other officials speaking on Wednesday and Thursday struck a similarly hawkish tone, as inflation remains stubbornly stubborn.
Expectations of lower borrowing costs, coupled with geopolitical tensions and central bank buying, sent gold to a record high in April and has remained up more than a quarter this year. The precious metal has been range-bound for the past few months, but market observers, including the wealth management unit of UBS Group AG, anticipate further gains.
Gold fell 0.2% to $3,331.29 an ounce as of 10:43 a.m. in London. The Bloomberg Dollar Spot Index was flat. Platinum and silver fell, while palladium edged up.
Source: Bloomberg
