Precious-Gold edges higher as markets weigh Warsh's inflation message
GLD•Analysts see limited upside for gold
Gold is unlikely to sustain the latest gains for an extended period, analysts at TD Securities said in a note.
"The yellow metal is likely to drift back toward $3,900 per ounce as oil remains under pressure to move even higher through the summer."
Spot silver XAG= gained 0.4% to $57.86 per ounce, and palladium XPD= rose 1.5% to $1,264.49. Platinum XPT= fell 0.6% to $1,602.34.
Gold edges higher as markets assess Fed inflation stance
Gold prices edged higher on Thursday, as markets assessed comments from U.S. Federal Reserve Chairman Kevin Warsh on tackling inflation after the central bank left interest rates unchanged at its latest policy meeting.
Spot gold XAU= was up 0.3% at $4,076.29 per ounce, as of 0245 GMT after rising as much as 2% on Wednesday. U.S. gold futures GCcv1 for August delivery gained 1% to $4,073.60.
A divided Federal Reserve left interest rates unchanged on Wednesday while Warsh reaffirmed the central bank's commitment to bringing inflation under control, leaving markets uncertain about its next policy move.
"I think the markets were surprised, and somewhat disappointed by Warsh and his general approach. He seemed kind of disengaged from the need to raise interest rates," said Marex analyst Edward Meir.
"The markets have gone up to fight inflation, but he doesn't seem to be doing much, and so this has helped gold go up."
While gold is seen as an inflation hedge, it loses its appeal as a non-yielding asset in a high-interest-rate environment.
Markets are now pricing in a 63% chance of a rate hike in September, down from about 81% before the policy decision, according to CME Group's FedWatch tool.
