Gold price prediction today
Gold price prediction today
Key Highlights
- Gold price prediction today: Gold prices are under pressure due to the US Federal Reserve chairâs hawkish outlook, says Praveen Singh, Head Currencies and Commodities, Mirae Asset ShareKhan.Gold Price Performance:The Fed Chair Warsh, in his much-awaited maiden speech at the Jackson Hole Symposium on August 28, delivered a hawkish message as he expressed concerns over elevated inflation.
- Although, sticking to his policy of âno forward guidanceâ he did not signal a rate hike, he said that the Fed officials need to act if inflation does not come down quickly.Gold prices settled with a steep loss of 3.15% at $4455 Friday.
- The yellow metal slumped 3.2% in the week ending August 28.At the time of writing this article on the night of August 31, spot gold was trading with a daily loss of ~0.40% at $4436.
The gold market is grappling with the aftermath of US Federal Reserve Chair Jerome Warsh's hawkish speech at the Jackson Hole Symposium, where he expressed concerns over elevated inflation and urged officials to take action if it doesn't subside soon.
Warsh's comments have led to a sharp decline in gold prices, which settled at $4455 on Friday with a loss of 3.15%. The yellow metal has also faced downward pressure due to escalating US-Iran tensions, which have surged oil prices and added to the market's volatility.
Despite a weaker-than-expected US nonfarm payroll report for July, Warsh described the US labor market as consistent with full employment, citing an unemployment rate of 4.1% and jobless claims near their lowest levels in decades.
The Fed chief also confirmed that short-term interest rates are the predominant tool to achieve the dual mandate of price stability and full employment, and warned against unconventional policies to spur economic activity unless genuinely needed.
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Geopolitical tensions continue to play a significant role in shaping market sentiment, with the US forces attacking Iran's Larkan Island in the Strait of Hormuz and Iran retaliating
Crude oil prices have jumped as a result, with Brent oil futures trading at $90.54 on Monday, up around 5% from the previous day.
The probability of the Fed hiking rates in its September 16 FOMC meeting has increased to 66%, according to market expectations.
Meanwhile, India's economy expanded faster than expected in the April-June quarter, with gross domestic product growing 7.8% from a year earlier, defying the impact of the Iran war.
Cina's factory activity improved more than forecast but contracted for the second straight month in August due to a worsening slump in construction and poor performance of the services industry.
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The PBoC may cut banks' reserve requirement ratio later this year to spur growth, according to analysts.
Gold prices are likely to consolidate in the near term, with a possible test of support at $4370, but downside pressure may be cushioned ahead of Friday's nonfarm payroll report release.
The yellow metal is also facing domestic pressure due to discounting of import duty cuts, which could further weigh on prices.
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I write about the forces shaping business and the global economy, from startup growth and changing markets to international trade and policy. My work focuses on breaking down complex developments into clear, practical insights and understanding what they could mean for businesses, investors, and the wider economy.
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