Gold prices stabilised near three-week lows in Asian trade on Wednesday, with investors bracing for the release of Federal Reserve meeting minutes and a key policy speech by Chair Jerome Powell later this week.
By 3:30 pm AEST (5:30 am GMT), spot gold edged up $3.3, or 0.1%, to US$3,319.03 per ounce, recovering slightly from earlier weakness.
The metal has been pressured by a firm United States dollar, which has benefited from expectations that Powell will counter speculation of aggressive interest rate cuts during his remarks at the Jackson Hole Economic Policy Symposium, scheduled for 21-23 August.
Powell has previously stressed caution on policy, with markets assessing the impact of U.S. President Donald Trump’s tariffs on inflation. Still, soft U.S. labour and consumer inflation data have prompted traders to anticipate two Fed rate cuts this year, the first likely in September.
The CME Group FedWatch Tool shows odds of a September cut at 84.9%, down from 91% a week earlier.
Adding to dollar strength, U.S. housing data released Tuesday came in stronger than expected, while geopolitical developments around Ukraine remained in focus.
Despite progress in peace talks, with U.S., Ukrainian and EU leaders agreeing on security guarantees, Trump reiterated that U.S. ground troops will not be deployed, though air support could be part of any deal to end Russia’s war.
White House Press Secretary Karoline Leavitt confirmed plans are under consideration for a bilateral meeting between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy.
Attention now shifts to the Fed’s July meeting minutes, though they are unlikely to provide fresh insight into the rate outlook since they pre-date the release of jobs and CPI data. Instead, markets are set to closely parse Powell’s Jackson Hole speech on Friday for confirmation of whether the Fed will maintain its dovish tilt in the face of emerging risks to the U.S. economy and labour market.
