Gold prices held steady on Friday as market participants awaited remarks from Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium, seeking further clues on the central bank’s future interest rate policy.
Spot gold was little changed at $4,603.91 per ounce as of 0652 GMT.
The precious metal touched a more than three-month high of $4,696.18 on Tuesday after the US Treasury announced support measures for long-duration bonds.
US gold futures also eased by 0.1% to $4,657.10.
Investors are closely watching Warsh’s remarks for signals on whether the Federal Reserve could maintain a hawkish monetary policy stance in response to persistent inflation concerns.
Matt Simpson, a senior analyst at StoneX, said there was a stronger case for Warsh to adopt a hawkish tone.
“The case for Warsh to lean hawkish is greater than the case for him not to, and that could see gold retreat further from its cycle highs in the near term,” Simpson said.
However, he noted that any decline in gold prices could attract investors who missed the earlier rally.
“But I suspect any such dip will be viewed favourably by bulls who missed out on the first phase of the rally and are keen to have another crack at $5,000,” he said.
Federal Reserve officials raised concerns about the US inflation outlook on Thursday as central bankers gathered for the Jackson Hole symposium.
Their comments came a day after data showed that the Personal Consumption Expenditures price index, the Federal Reserve’s preferred inflation measure, stood at 3.7% in the 12 months through July.
Warsh is scheduled to speak later on Friday, with his comments expected to provide further direction for financial markets.
According to the CME FedWatch tool, traders see roughly a one-third chance of a US interest rate hike in September and a 74.2% probability of a rate increase by December.
Gold typically loses some of its appeal in a high-interest-rate environment because it does not offer investors a yield.
Despite concerns about interest rates, analysts said the precious metal continues to receive support from improving participation in exchange-traded funds and futures markets.
Concerns over US fiscal credibility and continued buying by official institutions have also supported gold prices.
Christopher Wong, a precious metals strategist at OCBC, said the market remained supported by these factors, although the risk of price consolidation persisted.
Meanwhile, gold discounts in India fell sharply this week as demand weakened amid speculation that the government could consider reversing a recent increase in import duties.
Other precious metals recorded gains on Friday.
Spot silver rose 1.3% to $70.13 per ounce, while platinum gained 1.7% to $1,878.58 per ounce.
Palladium also increased by 2.1% to $1,379.50 per ounce.
