Gold prices remained stable on Friday, poised for their best weekly performance since mid-July. Support came from a decline in U.S. bond yields ahead of Federal Reserve Chair Jerome Powell’s forthcoming remarks at the Jackson Hole symposium.
Spot gold slightly declined by 0.1% to $1,915.40 per ounce by 0958 GMT, with a weekly gain of about 1.4%.
U.S. gold futures slipped by 0.2% to $1,943.50.
Although the 10-year Treasury yields reversed earlier weekly gains, thus benefiting gold, the ongoing six-week rise of the U.S. dollar capped the metal’s gains.
According to Edward Gardner, a commodities economist at Capital Economics, the recent price appreciation could be attributed to opportunistic buying following a drop from approximately $2,000 per ounce in July to around $1,900.
In anticipation of Jerome Powell’s speech, two Fed officials acknowledged the likelihood of no further rate increases and expressed tentative acceptance of the rise in bond market yields. The European Central Bank also showed signs of contemplating a pause in rate hikes due to declining growth prospects.
When Powell delivers his speech, it’s expected he will echo key themes from recent central bank meetings, emphasizing that weaker inflation data is welcome, but the overall task is not yet complete.
Rhona O’Connell, an analyst at StoneX, noted that while markets are already factoring in the potential for a rate hike, gold may experience a brief decline if Powell leans in that direction. However, any such dip would likely recover swiftly.
In the broader metals market:
Spot silver dipped by 0.1% to $24.12 per ounce.
Platinum gained 0.6% to $939.36.
Palladium fell by 0.2% to $1,237.66.
Silver and platinum were on track for their best week since July 14, while palladium appeared set for a second consecutive weekly decline.
