Gold moved lower at the opening of the week, pressured by a strengthening US dollar (USD) despite rising confidence in a rate cut at the September FOMC meeting following Chairman Jerome Powell’s latest comments at the Jackson Hole Symposium.
At 9.20 am, gold prices were at $3,365.50, down 0.19% since it opened early Monday in Asian trading.
Jerome Powell in his speech was open to cutting interest rates at the September meeting, but the position on economic data becomes complicated if inflationary pressures continue to rise, adding that the jobs report remains risky.
The market is now placing as high as 85% hope for a 25 basis point cut at the next meeting as the latest ‘dovish’ statement provides some support to gold prices.
Lower interest rates can reduce the risk of opportunities and support the value of the yellow metal to rise higher.
In addition, the escalating tensions between Russia and Ukraine continue to provide higher levels for gold.
Ukrainian President Zelensky said they would continue to fight for freedom even if their voices were hard to hear, in a speech on Independence Day.
The speech came after Russia accused Ukraine of attacking power facilities and energy centers, a drone attack that sparked a fire at the Kursk regional nuclear power plant.
For now, market participants will be watching the preliminary reading of US second-quarter Gross Domestic Product (GDP) due later this week, with the US economy expected to grow at an annualized rate of 3.0%, providing support for the US dollar.
