A staff member arranges gold jewelry at a gold store in Taiyuan, Shanxi Province of China. Gold prices edged higher on Thursday as the dollar slipped, while investors looked forward to a speech by U.S. Federal Reserve Chair Jerome Powell at the Jackson Hole symposium for clues on interest rate hikes and the health of the economy.
Zhang Yun | China News Service | Getty Images
Gold rose on Thursday as the dollar slipped from recent highs, while investors awaited the Jackson Hole symposium for cues on the Federal Reserve’s monetary policy.
Focus will be on U.S. Federal Reserve Chair Jerome Powell’s speech at the central banks’ conference in Wyoming on Friday for hints on the Fed’s interest rate hike strategy.
“Gold is just seeing a corrective bounce from recent selling pressure. The dollar has backed off from its highs and there is some positioning ahead of Powell’s speech,” said Jim Wyckoff, senior analyst at Kitco Metals.
“In the near term, gold charts are still bearish. But in the longer-term, there is still upside potential for gold as there will be some safe-haven demand any time the economy is wobbly.”
The dollar index fell 0.2%, making gold cheaper for overseas buyers. Gold is considered a safe investment amid economic turbulence. However, interest rate hikes increase the opportunity cost of holding bullion.
Investors also took stock of data showing the U.S. economy contracted at a moderate pace than initially thought in the second quarter. In the physical market, top consumer China’s net gold imports via Hong Kong hit a nine-month high in July.
UBS raised its palladium price outlook on “renewed robust imports by China”, forecasting prices at $1,900 per ounce in December, but retained a negative outlook on the metal over slowing growth in Europe and North America.