- Gold and silver prices rose as investors awaited the Federal Reserve's interest rate outlook
- Spot gold increased 0.30% to $4,608.49, and silver jumped 1.66% to about $69.2 per ounce
- Gold futures were flat while silver futures gained 0.4% on the MCX September contracts
Gold, silver prices rallied as investors turned their focus to the Federal Reserve's interest-rate path ahead of the annual Jackson Hole gathering.
Spot gold rose 0.30% to $4,608.49, while silver jumped 1.66% to around $69.2/oz on Thursday, August 27 by 10:06 pm IST.
MCX gold September futures contract was flat Rs 1,58,568 per 10 grams, while MCX silver September futures contract climbed 0.4% to Rs 2,40,585 per kg.
On Wednesday, gold ended a five-day winning streak after US inflation data stood above the Fed's target, heightening possibility for a rate hike. The precious metal is still above 13% this month, with a fresh momentum following the US Treasury's unexpected intervention in the bond market last week. The measures to control the cost of the US debt pile have raised interest in the so-called debasement trade that helped boost gold's record-breaking rally last year, with investors buying the bullion as a hedge.
The rally in precious metals come even as US inflation remained well above the Fed's target, with headline PCE at 3.7% against expectations of 3.6%, even as core inflation held steady at 3.3%.
Will gold's uptrend continue?
According to Kaynat Chainwala, AVP Commodity Research, Kotak Securities, "Beyond the inflation print, strength in durable goods orders and income has added to the case that the economy isn't cooling fast enough to justify a dovish pivot, keeping a rate-hike scenario alive rather than off the table."
The expert added, "That's tempered, but not reversed, bullion's broader uptrend, which remains underpinned by last week's Treasury buyback intervention, a dollar sitting near three-month lows, and steady Chinese physical demand."
In terms of outlook, Chainwala noted that bullion market's real test now is Fed Chair Kevin Warsh's Jackson Hole address due tomorrow. Given his prior remarks that the Fed is "not constrained by market prices," any hawkish lean here could pressure gold and silver further, while a neutral-to-dovish tone would likely reignite the rally toward recent highs.
ALSO READ: Gold Rally Eases as Traders Assess Fed Rate Path Ahead of Jackson Hole
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