Gold prices were broadly unchanged on Friday as investors awaited Federal Reserve Chair Kevin Warsh’s speech at the Jackson Hole symposium for indications on the outlook for U.S. interest rates.
Spot gold was flat at $4,600.19 an ounce at 02:50 ET, or 06:50 GMT, while U.S. gold futures declined 0.3% to $4,651.41.
The precious metal had reached a three-month high of close to $4,700 an ounce earlier in the week amid concerns over U.S. fiscal policy and moves by the Treasury to support longer-dated bonds.
Despite those gains, gold was heading for a marginal weekly decline following three consecutive weeks of increases.
Markets await signals on Federal Reserve policy
Investors were positioned cautiously ahead of Warsh’s speech, scheduled for 10 a.m. ET, or 1400 GMT, on Friday.
The address will be Warsh’s first major speech as Federal Reserve chair at Jackson Hole, with markets looking for indications of how the central bank views inflation and the future path of interest rates.
Recent inflation data have affected expectations for monetary policy. The personal consumption expenditures price index, the Federal Reserve’s preferred inflation measure, increased 3.7% in the year through July.
According to the CME FedWatch tool, markets were pricing in a 34% probability of an interest-rate increase in September and a 74% probability of an increase by December.
These figures represent market-implied probabilities rather than Federal Reserve guidance.
Interest-rate expectations remain relevant for gold
Higher interest rates can reduce the relative appeal of gold because the metal does not generate interest income compared with yield-bearing assets.
Gold has recently received support from lower bond yields and a weaker U.S. dollar. Lower yields reduce the opportunity cost associated with holding non-yielding assets, while a weaker dollar can make dollar-denominated gold less expensive for buyers using other currencies.
Gold has gained more than 13% during August, despite Friday’s limited movement and the prospect of a small weekly decline.
Silver and platinum advance
Other precious metals traded higher on Friday.
Silver gained 1.3% to $70.11 an ounce, while platinum advanced 1.8% to $1,882.60 an ounce.
Copper prices also moved higher. Benchmark copper futures on the London Metal Exchange rose 0.4% to $14,338.15 a tonne, while U.S. copper futures gained 0.2% to $6.68 a pound.