Gold futures edged higher on Wednesday, holding near $4,660 per ounce as investors assessed U.S. inflation data and waited for Federal Reserve Chair Kevin Warsh’s keynote address at the Jackson Hole symposium on Friday.
Spot gold rose 0.3% to $4,607.41 an ounce by 15:27 ET, while gold futures gained 0.2% to $4,660.56 an ounce. The prior week, bullion surged more than 5%, extending gains as the U.S. dollar index fell nearly 1% over the same period. The metal has been supported by broader concerns over fiscal sustainability, with the U.S. national debt exceeding $40 trillion and long-end Treasury yields reaching 19-year highs earlier this month.
The advance came after the Commerce Department reported that the core Personal Consumption Expenditures price index rose 0.2% month-on-month and 3.3% year-on-year in July, matching economists’ expectations. The Fed’s long-term inflation target remains 2%. Separately, the second estimate of U.S. real GDP growth for the second quarter was unrevised at 1.5%.
Analysts noted that Warsh’s speech could signal whether the central bank remains focused on inflation or signals a more patient approach, given recent signs of cooling labor and consumer markets. José Torres, senior economist at Interactive Brokers, said the Fed’s stance is pivotal amid efforts by the White House and Treasury to stabilize long-term yields. He added that if the Fed is seen as accommodating fiscal pressures, the dollar and longer-dated bonds could face selling pressure.
Geopolitical tensions also weighed on sentiment, with the White House reiterating that no negotiations with Iran are underway following the collapse of a mid-June memorandum of understanding. Washington has imposed new sanctions under "Operation Economic Outcast" and warned against economic engagement with Tehran. Oil prices rose 2.2% to $88.85 a barrel, adding to the backdrop of elevated energy costs.
Investors continued to rotate into hard assets, including gold and cryptocurrencies, amid skepticism over fiat currencies, rising bond yields, and heavy debt issuance by major technology firms funding AI infrastructure. The Jackson Hole event is expected to provide further clarity on the Fed’s policy trajectory as markets brace for potential volatility in the dollar and Treasury markets.
