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  • Writer's pictureanalysiswatch

Title: Gold muted ahead of Powell's Jackson Hole speech

Aug 26, 202210:19

By: AnalysisWatch

Gold prices fell on Friday as the dollar strengthened, while investors prepared for Federal Reserve Chairman Jerome Powell's speech at a symposium in Jackson Hole in search of clues on further rate hikes.

Spot gold was down 0.4% to $1,751.87 an ounce by 0858 GMT, but is up 0.2% so far this week. U.S. gold futures, GOLD, were 0.4% lower at $1,763.90.

The gold market benefited from short covering ahead of Jackson Hole, but momentum for growth has clearly dissipated with the dollar holding near 20-year highs, said independent analyst Ross Norman.

"In the case of gold, the outcome for price direction is likely to be the second-order effect seen by another dollar move," Norman said, adding that he expects gains for gold to remain limited right now.

Powell is scheduled to speak at 14:00 GMT.

Some market participants do not expect Powell to make a clear announcement on the size of the next rate hike, with recent comments from Fed policymakers on rates indicating they may go further.

Analysts noted that gold would need to see clear signs of a slowdown in monetary tightening to break out of current ranges.

While gold is considered a safe investment in times of economic instability, interest rate hikes increase the opportunity cost of holding this unprofitable asset.

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