Gold slipped Tuesday but held near its highest level in more than three months, pressured lower by a weaker US dollar and the US Treasury's bond buyback plans. Traders are now watching Fed Chair Warsh's Jackson Hole speech for direction on rates.
Gold eases from a three-month peak
Spot gold fell 0.3% to $4,635.86 per ounce on Tuesday, after touching its highest level since mid-May. UOB forecasts the metal is on track for its strongest monthly gain since September 1999, and gold has gained more than 15% so far this month.
Gold futures slipped 0.1% to $4,692.20, also hovering near a three-month high.
Weaker dollar and bond buyback plans support the metal
A softer dollar makes greenback-priced gold more attractive to holders of foreign currencies, while lower Treasury yields reduce the opportunity cost of holding bullion. The dollar index has lost 0.8% this month, and Treasury yields have stayed elevated for most of August.
However, the government's bond buyback plan has kept a lid on those yields, pushing them down 3 basis points this month.
Markets look to Jackson Hole for the next signal
Investors are now focused on Fed Chair Warsh's upcoming speech ahead of the Jackson Hole Symposium this week, looking for clues on the interest rate outlook. A hawkish tone from Warsh would likely halt the ongoing rally, but a dovish surprise would be highly bullish for gold.
Source: CNBC
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