Fadi Al Kurdi
Gold continued to trade sideways on Thursday, as investors awaited the start of the Federal Reserve’s Jackson Hole symposium. Market participants could stay on the sidelines and remain cautious before Chair Jerome Powell’s speech. The uncertainty over whether he will signal a stronger commitment to supporting employment or reaffirm the fight against inflation could affect the market’s direction.
Expectations for monetary easing remain elevated. Futures markets continue to assign a high probability to a quarter-point rate cut in September. However, divisions between Fed members could add to the uncertainty. A more dovish stance could help drive gold to the upside.
At the same time, political pressure, with President Trump’s calls for the resignation of a Fed governor, intensified concerns over the central bank’s independence. This could benefit gold as investors could seek refuge in safe-haven assets like gold. Trump’s push to replace Fed governors could also precipitate interest rate cuts, which could favor gold appreciation.
Globally, geopolitical tensions continue to underpin interest in safe-haven assets. Any failure to reach a peace agreement in Ukraine could bolster demand for gold. In the Middle East, Israel authorised a major military operation in Gaza, defying international calls for a ceasefire.
Al Kurdi is founder CEO FFA Kings
