(Bloomberg) — Gold edged higher as traders weigh the outlook for US monetary policy ahead of a key speech by Federal Reserve Chair Jerome Powell later this week.
Bullion traded above $3,320 an ounce as markets await clues from Powell’s annual address in Jackson Hole, Wyoming, on Friday. Swaps are pricing in a high probability the Fed will cut borrowing costs by a quarter point next month. Lower rates benefit gold as it doesn’t pay interest.
Still, the Fed’s monetary easing path has been complicated by a hotter-than-expected inflation print last week that caused some traders to dial back rate-cut expectations. In the face of mounting pressure from President Donald Trump for hefty reductions, Powell has expressed concern with import tariffs at the highest levels in a century.
Markets are also watching US and European efforts towards a landmark meeting between presidents Vladimir Putin and Volodymyr Zelenskiy. Any signs of a Russia-Ukraine ceasefire could ease demand for the precious metal as a haven, but a peace deal is still elusive.
Gold has gained more than a quarter this year, as trade war fears and geopolitical tensions boosted its appeal as a safe asset, while central bank buying and inflows to exchange-traded funds also provided support. Though it’s traded in a relatively tight range since reaching a record at roughly $3,500 in April, banks like UBS Group AG and Citigroup Inc. expect further gains.
Spot gold edged up to $ an ounce as of 11:37 a.m. in London. The Bloomberg Dollar Spot Index was flat. Silver and palladium dropped, while platinum gained.
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