Gold advances on dollar dip with Jackson Hole meet on radar
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Gold prices gained for a third consecutive session on Thursday, helped by a softer dollar as investors looked ahead to the Jackson Hole economic symposium for cues on inflation and the U.S. Federal Reserve's rate path.
Spot gold rose 0.8% to $1,764.39 per ounce by 0927 GMT. U.S. gold futures gained 0.9% to $1,777.60.
The economic symposium starts on Thursday and of particular interest is Fed Chair Jerome Powell's speech on Friday. Investors are interested to know whether the Fed would send a clear message that could act as a fresh catalyst for bullion.
A slight softening of the U.S. dollar, peaking of U.S. real yields and renewed risk aversion in financial markets, seem to be the driving factors of gold's tentative rebound which is however not backed by safe-haven buying, said Carsten Menke, analyst at Julius Baer. [MKTS/GLOB]
The dollar index dropped 0.5%, making gold less expensive for overseas buyers. [USD/] [US/]
"Central bankers will outline their approaches of how to deal with high inflation and a cyclically cooling economy via frontloading of rate hikes," Menke said, adding, this is what the market already expects from the symposium at the moment, and any major reaction of gold prices is rather unlikely.
Rate hikes increase the opportunity cost of holding bullion, which pays no interest.
Rhona O'Connell, analyst at StoneX, attributed the gains in bullion to China's plan to take more steps to support the economy, including increasing funding support for infrastructure projects.
The whole commodities sector has benefited from the news, O'Connell said, adding gold is now moving back into neutral territory after being oversold.
China's net gold imports via Hong Kong rose by about 20.2% in July.
Elsewhere, spot silver rose 1% to $19.35 per ounce, platinum advanced 0.6% to $882.27, and palladium climbed 0.9% to $2,052.41.
