Gold drifts higher, eyes on Fed Chair Warsh's comments
GLD•Gold rises as dollar-debasement fears linger
Gold prices drifted higher on Thursday as so-called dollar debasement fears lingered, while attention shifted to highly anticipated remarks from U.S. Federal Reserve Chair Kevin Warsh this week.
Spot gold XAU= was up 0.4% at $4,611.16 per ounce by 0630 GMT. U.S. gold futures GCcv1 rose 0.3% to $4,664.50.
The dollar-debasement narrative, coupled with concerns about the U.S. budget deficit, remains supportive of gold in the medium term, said Kelvin Wong, a senior market analyst at OANDA.
Gold prices rose over 5% last week after the U.S. Treasury's move to expand buybacks of older long-dated bonds, which renewed dollar-debasement fears.
Markets look to Warsh remarks, inflation data and geopolitics
Warsh's remarks at the annual Jackson Hole symposium in Wyoming on Friday are expected to be closely watched for further direction.
"The market is awaiting the speech for greater clarity on how the Fed will navigate the current economic landscape. If he does not provide specific forward-looking monetary policy guidance, current market pricing for rate hikes is likely to remain largely unchanged," Wong said.
Markets see a 36.1% probability of a September U.S. rate hike and a 72.1% chance by December, according to the CME FedWatch Tool.
Data on Wednesday showed that annual U.S. inflation held steady in July, well above the Fed's 2% target, and the unexpected pause in the decline from a recent Iran war-induced peak is likely to intensify the central bank's debate over whether rates should be lifted or held steady.
