Gold steadied near $4,600 an ounce as investors weighed the outlook for US interest rates ahead of a key speech by Federal Reserve Chairman Kevin Warsh.
Bullion was little changed after adding 0.2% in the previous session but remained on track for its biggest monthly gain since 1999. The metal was given fresh impetus by the US Treasury's surprise intervention in the bond market, which revived interest in the so-called debasement trade that helped power gold's record-breaking rally last year.
Investors will be seeking clues to the Fed's approach to inflation when Warsh makes his first major speech as chairman later on Friday. The much-anticipated address at the central bank's annual Jackson Hole symposium offers Warsh an opportunity to counter criticism that he hasn't been forthright with his views on the economy. ALSO READ: Gold To Retain Glitter? Expert Explains Why 'Broader Uptrend' Stays Despite Fed Rate Hike Bets Economists and policymakers are divided over the need to hike rates in the coming months, which would be a headwind for non-yielding gold. Though Fed officials kept borrowing costs unchanged in July, three dissented in favor of a quarter-point hike. At Jackson Hole on Thursday, two central bank officials said interest-rate setting was not restraining the US economy at a time when inflation continues to run above a 2% target, urging their peers to act soon to cool price pressures. But Fed Bank of Boston President Susan Collins said there's evidence that rates are "mildly restrictive." Gold's marked rebound - the metal is on track to gain nearly 14% in August - has been supported by a broad range of investor participation. Bullion-backed exchange-traded funds tracked by Bloomberg added more than 28 tons last week, the most since January, followed by a further 20 tons so far this week. Central banks have also stepped up purchases. Spot gold rose 0.1% to $4,603.23 an ounce at 7:15 a.m. in Singapore. Silver also climbed 0.1%, to $69.28 an ounce. Platinum and palladium edged higher. The Bloomberg Dollar Spot Index, a gauge of the US dollar, slipped 0.1%. |
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