Gold prices edged up from 5-month lows on Monday after declining in the previous five sessions, as investors saddled up for a gathering of central bankers in Jackson Hole, Wyoming this week for outlook on economy and interest rates.
Spot gold rose 0.3 percent to $1,892.88 per ounce while US gold futures added 0.3 percent to $1,921.70.
Gold had dropped to its lowest since mid-March at $1,883.70 last week, as buoyant economic data raised bets for higher-for-longer US interest rates, reducing demand for the non-yielding commodity.
“The dollar index is holding above the 103 level which is making forward progress for assets like gold quite the struggle,” KCM Trade Chief Market Analyst Tim Waterer said.
Investors’ focus will be on US Federal Reserve chair Jerome Powell’s speech on Friday, as central bankers from around the world assemble in Jackson Hole for their annual conference.
“It will be interesting to see if Fed Chairman Jerome Powell echoes the hawkish tone of the most recent FOMC minutes,” Waterer added.
The Fed is likely done raising interest rates, according to a strong majority of economists polled by Reuters, and a slight majority now expect the central bank to wait at least through end-March before cutting them.
Rising Treasury bond yields and home mortgage rates may reduce support at the Fed for additional interest rate increases, the prospect of which have already been ebbing on the basis of weaker inflation. – Reuters
