Gold Prices Decline Amid Anticipation of Federal Reserve's Stance

SadaNews - Gold prices recorded a slight decline ahead of an important speech by Federal Reserve Chairman Jerome Powell this week, which may provide new indicators about the central bank's monetary policy direction.

The precious metal was traded at around $3,315 per ounce in early Asian trading, maintaining a 0.5% decrease from the previous session, after recent efforts to halt the war between Russia and Ukraine affected the demand for safe havens.

All eyes are on Powell's annual speech in Jackson Hole, Wyoming, on Friday, amid strong expectations that the Fed will cut borrowing costs by a quarter percentage point next month. A decrease in interest rates is positive for gold as it is a non-yielding asset.

The Data Complicates the Fed's Position

The path to monetary easing for the bank has been complicated due to inflation data that exceeded expectations last week, prompting some traders to cut their bets on an interest rate cut. Conversely, Powell is under pressure from President Donald Trump to implement significant cuts, despite the Fed's chairman's concerns that the tariff agenda could increase inflationary pressures.

Gold has gained over 25% since the beginning of the year, supported by central bank purchases, ETF inflows, geopolitical tensions, in addition to concerns about the impact of tariffs on the global economy.

Despite trading within a relatively narrow range for several months, analysts widely expect further gains amid expectations of interest rate cuts and ongoing efforts to move away from the dollar.

Spot gold stabilized at $3,314.89 per ounce by 8:28 AM Singapore time. The Bloomberg Dollar Spot Index rose by 0.1%, while the prices of silver, platinum, and palladium remained unchanged.