(RTTNews) – Partially offsetting the losses from yesterday’s session, gold prices have edged higher on Wednesday as traders await a speech by U.S. Federal Reserve Chair Kevin Warsh at the Jackson Hole Symposium tomorrow to derive clues on interest rates while Qatar renewed efforts to bring the U.S. and Iran back for peace talks.
Front Month Comex Gold for September month delivery has inched higher by $8.60 (or 0.19%) to $4,609.20 per troy ounce.
Front Month Comex Silver for September month delivery has soared by $1.439 (or 2.12%) to $69.465 per troy ounce.
Yesterday in the U.S., data from the U.S. Bureau of Economic Analysis revealed that the Personal Consumption Expenditure price index increased 3.70% year-on-year in July and 0.20% on a month-on-month basis. Both numbers were slightly higher than market expectations.
The core PCE index (which excludes food and energy) increased by 3.30% on a year-on-year basis in July and by 0.20% from the previous month.
Matching forecasts, the readings indicate that though inflation is above the target of the U.S. Federal Reserve, the rate holds steady.
Last Wednesday, the U.S. Treasury recorded that the U.S. national debt crossed $40 trillion for the first time.
The same day, the Treasury announced plans to increase its buybacks of long-term government debt with plans to at least double the maximum size of repurchasing operation from $2 billion to at least $4 billion, starting September 9. Though the announcement initially triggered a rally in bonds, it soon faded.
The decision was seen as an effort by U.S. Treasury Secretary Scott Bessent to lower the yield on 10-year notes.
An interest rate hike could support the U.S. dollar, which is experiencing downside pressure due to U.S. Treasury’s recent decision.
U.S. President Donald Trump has been advocating a low-interest rate regime for months.
While a dovish approach could push inflation higher, weaken the dollar, and strengthen gold, a hawkish path could act against non-yielding gold and impact consumption, which is already affected by high gasoline prices.
With the Fed under pressure to balance growth against inflation as well as the need to align its policy with the Treasury’s moves, economists are awaiting the keynote address by U.S. Fed Chair Kevin Warsh tomorrow.
In its July meeting, the Fed decided to keep interest rates unchanged. At his press conference on July 29, Warsh stated that he was more concerned about inflation.
On Monday, the U.S. administration announced a very large economic operation against Iran.
With both nations claiming control and authority over the Strait of Hormuz shipping traffic, vessel movement is still down.
Iran and Oman announced closing in on a deal to jointly manage the Strait of Hormuz.
Qatar’s Foreign Minister Sheikh Mohammed bin Abdulrahman Al Thani arrived in Iran and held discussions with his Iranian counterpart.
Even though concerns of a war in the Middle East subsided after the U.S. shifted its battle against Iran from military maneuvers to an economic embargo, the U.S.-Iran stalemate continues to diminish expectations of the resumption of oil and energy trade anytime soon.
Today, the U.S. Labor Department’s data showed that unemployment benefit claims fell by 4,000 to 203,000 for the third week of August, below expectations of a rise to 208,000.
Meanwhile, continuing jobless claims decreased to 1,778,000 for the week ending August 15 from 1,796,000 of the previous week.
Currently, investors are betting on a 34.10% chance of a 25-basis-point interest rate-hike by the U.S. Federal Reserve at its upcoming meeting on September 15-16, while the odds on rates being held at the current level stand at 65.90%, according to the CME Group’s FedWatch Tool.
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