Gold prices recovered to some extent on Thursday after Wednesday’s drop from a three-month high, but could remain under pressure.
Slightly firmer U.S. Treasury yields and a stable dollar limited the rebound, while caution remains ahead of the Jackson Hole Symposium.
The metal came under some pressure yesterday as July’s PCE came in a touch firmer than expected, with headline inflation at 3.7% year-on-year versus a forecast of 3.6%, and a 0.2% monthly rise.
Core PCE held at 3.3%, as expected. The data lifted September hike odds only slightly, leaving a hold as the base case and limiting further selling. However, a rate hike is still expected this year with a potential increase in 2027, which could weigh on gold to some extent.
Looking ahead, attention is focused on Fed Chair Kevin Warsh’s speech on Friday. A balanced tone could support gold, while hawkish remarks may lift yields and pressure the metal. A soft jobless claims print today would support the case for a Fed hold and pull yields lower, supporting gold. Markets will also watch any shifts in geopolitical developments in the Middle East and their impact on oil prices and inflation expectations.
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