Gold prices experienced a slight dip on Friday as traders leaned toward the dollar, anticipating further cues on U.S. monetary policy from the Jackson Hole Symposium. However, despite signs of economic growth softening, gold managed to stay above crucial levels and was on track for its first positive week in five. This recovery followed a period in August when gold touched five-month lows. Notably, spot prices remained steady at the significant $1,900 per ounce mark. Nonetheless, the future of gold appeared clouded due to the looming possibility of higher U.S. interest rates. On Friday, the dollar reached a level not seen in over two months, and Treasury yields crept back up to multi-decade highs.
All eyes were now fixed on Federal Reserve Chair Jerome Powell's upcoming speech at Jackson Hole later in the day. Investors were apprehensive about potentially hawkish signals from Powell, particularly in light of persistent U.S. inflation and continued labor market strength as indicated by recent data. The rise in interest rates over the past year had increased the opportunity cost of holding gold, thereby limiting the precious metal's gains. Nevertheless, gold received some support during the week, driven by sluggish business activity data, which led to speculations that the Fed might have limited room to further raise interest rates.
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