Gold holds firm as traders await Warsh's Jackson Hole debut speech

Gold prices were steady for a second straight session on Thursday as traders booked profits after prices climbed to a more than three-month peak this week, with markets awaiting Federal Reserve Chair Kevin Warsh's speech at Jackson Hole for clues to his roadmap on inflation and monetary policy.

Spot gold XAU= was up 0.06% at $4,594.82 per ounce by 1502 GMT, after settling 1.4% lower on Wednesday in its biggest one-day decline in a week. U.S. gold futures GCcv1 for December delivery fell 0.1% to $4,648.60.

"We're just seeing some mild profit-taking pressure from the shorter-term futures traders ahead of Friday morning's speech by Kevin Warsh at the Jackson Hole Symposium," said Jim Wyckoff, a market analyst at American Gold Exchange.

"Selling interest is being limited by a weaker dollar index today as we speak, but mostly just treading water ahead of this Jackson Hole meeting," Wyckoff added.

Gold prices climbed to their highest since mid-May earlier this week, with the recent rally driven by renewed dollar-debasement concerns following the U.S. Treasury's move last week to ramp up buybacks of older long-dated bonds.

Markets are awaiting remarks from Warsh at the annual Jackson Hole symposium in Wyoming on Friday, with investors hoping the Fed chair will use his debut speech to explain his roadmap for returning inflation to the Fed's target and what he sees as the bond market's role in that strategy.

Data on Wednesday showed the U.S. Personal Consumption Expenditures Price Index increased 3.7% in the 12 months through July, unchanged from June. Economists polled by Reuters had forecast a PCE reading, which the Fed uses to set its target, of 3.6%.

While expectations of a September U.S. rate hike have gone down to just 34%, there's still a 74% chance of a hike by December, according to the CME FedWatch Tool.