Gold Prices Retreat as Markets Anticipate US Inflation Data
Gold prices declined on Tuesday, after having earlier in the day recorded their highest levels in over three months, as investor focus shifted towards anticipated US inflation data and a speech by Federal Reserve Chairman Kevin Warsh later this week. Spot gold prices saw a 0.2% decrease, settling at $4640.39 per ounce by 03:34 GMT. Concurrently, US gold futures remained stable at $4696. Prices had surged sharply last week following an announcement by the US Treasury Department to double the size of its long-term bond repurchase operations to support market liquidity. This announcement sparked concerns regarding currency devaluation, according to news reports. In an analytical note, TD Securities indicated that these concerns over the depreciation of the US dollar are expected to provide good support for gold in the coming weeks, especially since the Federal Reserve has not sent a clear signal about its readiness to combat rising inflation. However, the firm cautioned that it is still too early for the yellow metal's price to reach their target of $5350 per ounce, given the potential risks of short-term interest rate hikes eventually. Gold is widely regarded as a safe haven against inflation, but rising interest rates can limit demand for the precious metal, which does not yield returns. The first speech by Federal Reserve Chairman Kevin Warsh at this week's annual Jackson Hole symposium gains added significance, as traders and analysts seek guidance on the recent surge in bond yields and assurances regarding the central bank's independence from the administration of US President Donald Trump. The US Personal Consumption Expenditures (PCE) report, the Federal Reserve's preferred measure of inflation, is scheduled for release on Wednesday. On the geopolitical front, Iran vowed to retaliate against expanded US economic sanctions, which Washington stated are aimed at cutting off Tehran's economic lifeline. Regarding other precious metals, spot silver decreased by 1.3% to $68.01 per ounce, platinum fell by 1.2% to $1853.85, and palladium dropped by approximately 1% to $1345.26.
