Gold Slips Ahead of Jackson Hole

Gold Slips Ahead of Jackson Hole

Gold slips a bit early Wednesday ahead of Jackson Hole as investors awaited signals on future monetary policy from the annual meeting of central bankers at the end of the week in Wyoming.

Fed Chairman Jerome Powell is set to speak Friday morning, and his remarks will be closely followed for indications on future interest rate hikes, efforts to combat inflation and any concern about a possible recession. European Central Bank Executive Board member is set to speak Saturday. Bank of England Governor Andrew Bailey will also attend.

Front-month gold futures rose 0.7% Tuesday to settle at $1,761.20 an ounce on Comex, though the December contract decreased 0.1% in the first two days of the week. Bullion dropped 1.4% in July after falling 2.2% in June and 3.3% in May, its worst month since September. The metal retreated 3.5% in 2021. The December contract is currently down $5.40 an ounce to $1755.80 and the DG spot price is $1746.20.

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.32% Tuesday to 984.38 metric tons, Reuters reported.

Investors are now betting there’s a 52% chance of a 50-basis-point rate hike in September, with just 48% projecting a 75-basis-point increase, according the CME FedWatch Tool. The Fed raised rates by 75 basis points each in June and July.

Minneapolis Fed President Neel Kashkari, a hawk, said Tuesday that his biggest fear is that the Fed won’t read the inflationary situation correctly and will have to become even more aggressive to combat it. If “this inflation is much more embedded at a much higher level than we appreciate or markets appreciate, then we are going to have to be more aggressive than I anticipate, probably for longer, to bring inflation back down,” he said.

Separately, a report from Zillow showed Tuesday that U.S. home values fell for the first time since 2012 in what some industry experts are calling a housing recession. Economic reports on durable goods, MBA mortgage applications, and pending home sales are due Wednesday. U.S. GDP and weekly initial jobless claims come out Thursday. U.S. personal income data, the PCE deflator, and the University of Michigan consumer sentiment report come out Friday.

Front-month silver futures gained 0.7% Tuesday to settle at $19.12 an ounce on Comex, though the December contract dropped 0.3% in the first two days of the week. Silver slipped 0.8% in July after declining 6.2% in June and falling 6.1% in May. It retreated 12% in 2021. Silver prices are tied to industrial demand. The September contract is currently down $0.181 an ounce to $18.845 and the DG spot price is $19.05.

Spot palladium retreated by $1 Tuesday to $2,001.00 an ounce and is down 6.9% so far this week. Palladium rose 9.9% in July after losing 2.9% in June and 14% in May, the biggest monthly decline since September. It retreated 22% in 2021. Currently, the DG spot price is up $41.10 an ounce to $2,041.00.

Spot platinum advanced 1% Tuesday to $891.20 an ounce, but is down 1.2% so far this week. Platinum retreated 0.3% in July after losing 7.2% in June. It dropped 9.4% last year. The DG spot price is down currently by $14.30 an ounce to $878.10.


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