Gold held an advance as investors weighed the outlook for the Federal Reserve’s monetary policy tightening path after new data pointed to some weakness in the US economy.
On Tuesday, bullion snapped six straight days of declines as the dollar took a leg down, with investors awaiting the annual gathering of central bankers at Jackson Hole later this week and Fed Chair Jerome Powell’s speech on Friday.
Goldman Sachs Group Inc. Chief Economist Jan Hatzius said he anticipates Powell will lay out a case for slower interest-rate increases. Still, Fed Bank of Minneapolis President Neel Kashkari said “it’s very clear the US central bank has to tighten monetary policy to bring inflation back under control.
Investors are assessing how aggressively the Fed can continue hiking rates in the face of mounting risks to growth. Economic activity weakened from the US to Europe and Asia, reinforcing concerns that soaring prices and the war in Ukraine will tip the world into a recession.
While bullion has steadied ahead of the Jackson Hole symposium, “the Dollar Index remains at multi-year highs bearing down its weight not only on gold prices but also on other currencies, Avtar Sandu, senior manager of commodities at Phillip Nova, said in a note.
Spot gold was little changed at $1,747.13 an ounce as of 6:42 a.m. in London, after climbing 0.7 percent on Tuesday. The Bloomberg Dollar Spot Index rose 0.1 percent after dropping 0.4 percent in the previous session. Silver and platinum were steady, while palladium edged higher.
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