Gold stagnant as investors await Jackson Hole 

Gold stagnant as investors await Jackson Hole

Gold stagnant just below the $1900 an ounce level as investors await news out of Jackson Hole during the annual gathering of central bankers at the end of the week.

Federal Reserve Chairman Jerome Powell is scheduled to speak Friday in Jackson Hole, Wyoming, and his comments will be closely watched for indications on whether the Fed plans to end its cycle of interest rate increases. Higher interest rates are typically bearish for gold, so an end or a pause to rate hikes would give precious metals a boost. 

Front-month gold futures fell 1.6% last week to settle at $1,916.50 an ounce on Comex, though the December contract added just $1.30 Friday. Bullion is down 4.6% in August after rising 4.1% in July and losing 2.7% in June. The metal gained 5.7% in the first half of the year after falling $2.40 in 2022. The December contract is currently up $5.7 (+0.30%) an ounce to $1922.20 and the DG spot price is $1891.50..

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.3% Friday to 890.10 metric tons, though they remained near the lowest level since January 2020, Reuters reported.

Physical gold premiums in China jumped to the highest level since December 2016 last week, Reuters reported. 

Minutes of the last Fed policy meeting, which were released Wednesday, showed that officials continued to express concern about the pace of inflation and said that more rate hikes could be necessary unless things change. 

But about 88.5% of investors tracked by the CME FedWatch Tool are betting that the Fed will keep its federal funds rate unchanged in September at 5.25% to 5.50%. Just 11.5% expect it to raise rates another 25 basis points. The central bank has raised rates by 5.25 percentage points since March 2022 in an effort to rein in inflation.

In other economic news to be tracked this week, data on U.S. existing home sales are due out Tuesday, U.S. weekly initial jobless claims come out Thursday and University of Michigan consumer sentiment for August is scheduled for Friday. 

Front-month silver futures gained 1.4% last week to settle at $23.06 an ounce on Comex, though the December contract added just 1.8 cents Friday. Silver is down 7.7% this month after advancing 8.5% in July and dropping 2.4% in June. It retreated 4.2% in the first half of the year after rising 3% in 2022. The December contract is currently up $0.480 (+2.08%) an ounce to $23.540 and the DG spot price is $23.09.

Spot palladium decreased 3.9% last week to $1,272.50 an ounce, though it increased 3.1% Friday. Palladium is down 1.9% this month after rising 3.6% in July and falling 9.5% in June. Palladium plummeted 31% in the first half of the year after losing 5.7% in 2022. The current DG spot price is down $26.00 an ounce to $1249.00.

Spot platinum rose 40 cents last week to $918.30 an ounce after rallying 2% Friday. Platinum is down 4.2% this month after gaining 5.2% in July and falling 9.3% in June. Platinum dropped 15% in the first half of the year after surging 10% in 2022. The DG spot price is currently down $8.30 an ounce to $912.70.

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