FX.co ★ Gold Steady as Investors Await Warsh's Jackson Hole Speech

Gold traded largely flat around $4,590 an ounce on Thursday, following its sharpest one-day percentage drop in a week, as investors awaited fresh policy signals from Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium on Friday. Despite slightly hotter US inflation data, persistent concerns over global debt continued to underpin demand for the metal.

Earlier this week, gold touched its highest level in more than three months, with the latest leg of the rally driven by renewed worries about dollar debasement after the US Treasury announced it would step up buybacks of older, long-dated bonds. Investors are now focused on Warsh’s first Jackson Hole address for insight into how the Fed plans to steer inflation back to its target.

Data released Wednesday showed the PCE price index rose 3.7% year-on-year in July, slightly above forecasts. According to the CME FedWatch Tool, markets are pricing in a 38% probability of a rate hike in September, with the odds of at least one increase by December still above 70%.