Gold holds steady as focus turns to Jackson Hole summit

Bengaluru — Gold prices were little changed on Thursday, holding above the key $1,500/oz level, as investors awaited the Federal Reserve chair’s speech at a global central bankers’ conclave for clues on future US interest rate cuts.

Spot gold inched down 0.1% to $1,500.14/oz by 4.26am GMT.

US gold futures were down 0.4% at $1,510.10/oz.

“We are seeing a holding pattern until the remarks from Federal Reserve chair Jerome Powell at the Jackson Hole symposium,” Oanda analyst Jeffrey Halley said.

If Powell says they are going to cut rates aggressively, that may not be great for gold in the short term since equities will gain, Halley added.

Markets are now focused on Powell’s speech at Jackson Hole on Friday, for clarity on the direction of US monetary policy, especially after an inversion in the Treasury yield curve highlighted the risk that the US economy may fall into recession.

Minutes of the Fed’s July meeting, released on Wednesday, showed policymakers were divided over whether to cut interest rates, but were united in wanting to signal they were not on a preset path to more easing.

However, futures are still fully priced for a quarter-point cut in rates in September, and over 100 basis points of easing by the end of 2020.

Traders are also looking at the Group of Seven summit this weekend for clues on what additional steps policymakers may take to boost economic growth.

Meanwhile, hopes for US fiscal stimulus got a knock when President Donald Trump reversed course and said he was not looking at cutting payroll taxes.

A range of manufacturing surveys from across the globe are due later on Thursday and risks are they will show a further slowdown in activity, especially in Europe.

Minutes from the European Central Bank’s last policy meeting are also awaited, and markets are looking for more details on exactly when and how aggressively it might ease policy.

Spot gold may rise to $1,524/oz as it has found a support at $1,497, according to Reuters analyst Wang Tao.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.80% to 851.91 tons on Wednesday.

The holdings have increased about 3%, or around 24 tons, so far in August.

Elsewhere, silver fell 0.3% to $17.06/oz, while platinum was down 0.6% to $847.89.

Palladium fell 0.5% to $1,463.89/oz.

Reuters