World gold prices fell in the trading session on August 28, falling below the 4,600 USD/ounce mark as investors shifted their attention to the outlook for US monetary policy and waited for the speech of US Federal Reserve (Fed) Chairman Kevin Warsh at the Jackson Hole conference.
World gold prices fell in the trading session on August 28, after rising in the previous session, as investors focused on the US interest rate outlook and waited for the speech of US Federal Reserve (Fed) Chairman Kevin Warsh at the Jackson Hole seminar.
As of 8:57 am Vietnam time, spot gold price decreased by 0.56%, to 4,576.08 USD/ounce. Meanwhile, December gold futures price decreased by 0.76%, to 4,628.50 USD/ounce.
Previously, in the trading session on August 27 in New York, gold prices increased by 0.4% to 4,610.89 USD/ounce at 3:19 pm local time. Gold prices fluctuated in an up-down range as investors assessed new signals about US monetary policy ahead of the Jackson Hole conference.
The upward momentum of gold prices in the session of August 27th took place after this precious metal ended its 5-session consecutive increase in the previous session.
Despite adjustments, gold prices still increased by about 14% in August, supported by concerns related to the US fiscal situation and developments in the bond market.
The market is currently focused on Fed Chairman Kevin Warsh's speech at the Jackson Hole conference. This is one of the events that investors are closely monitoring to assess the direction of US monetary policy in the coming time.
US economic data released this week shows that inflation is still higher than the Fed's target. This increases market caution about the possibility of interest rate adjustments in the near future.
High interest rates often put pressure on gold, because this precious metal does not generate interest income. Conversely, if the Fed sends a softer signal, interest rate expectations may support gold by reducing the attractiveness of USD-generated assets.
According to Liu Shiyao - an analyst at Chinese brokerage firm Zijin Tianfeng Futures Co. - if Mr. Warsh's speech does not lay the groundwork for the possibility of the Fed raising interest rates in September, the market may interpret this message in a soft direction.
Conversely, a tougher message about inflation and interest rates could put more pressure on gold to adjust, especially after a strong rally in the month.
Besides monetary policy, the developments of the US bond market are also attracting investors' attention. The unexpected move by the US Treasury Department on the bond market last week added momentum to gold.
Efforts to control the cost of US public debt have also increased interest in the trend of investing in gold as a defensive asset against the risk of prolonged budget deficits and a weakening USD.
On the precious metals market, spot silver price decreased 0.98%, to 68.59 USD/ounce. Platinum prices fell 0.60%, to $1,839.05/ounce, while palladium fell 0.77%, to $1,348/ounce.
After a strong increase in August, gold prices are entering a sensitive phase as investors are waiting for new signals from the Fed. The developments of interest rates, the USD and US bond yields will continue to be important factors determining the direction of the precious metal in the coming sessions.
