Market comment on behalf of Konstantinos Chrysikos Head of Customer Relationship Management at Kudo.com
Gold prices recovered to some extent on Thursday after Wednesday’s drop from a three-month high, but could remain under pressure. Slightly firmer U.S. Treasury yields and a stable dollar limited the rebound, while caution remains ahead of the Jackson Hole Symposium.
The metal came under some pressure yesterday as July’s PCE came in a touch firmer than expected, with headline inflation at 3.7% year-on-year versus a forecast of 3.6%, and a 0.2% monthly rise. Core PCE held at 3.3%, as expected. The data lifted September hike odds only slightly, leaving a hold as the base case and limiting further selling. However, a rate hike is still expected this year with a potential increase in 2027, which could weigh on gold to some extent.
Looking ahead, attention is focused on Fed Chair Kevin Warsh’s speech on Friday. A balanced tone could support gold, while hawkish remarks may lift yields and pressure the metal. A soft jobless claims print today would support the case for a Fed hold and pull yields lower, supporting gold. Markets will also watch any shifts in geopolitical developments in the Middle East and their impact on oil prices and inflation expectations.
Zaid Barem / ymm
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