Gold awaits Jackson Hole: All eyes on Fed policy signals

Gold stabilised around 4,600 USD per ounce on Friday, poised to close the week largely unchanged. Investors are awaiting Fed Chair Kevin Warsh’s speech at the annual Jackson Hole Economic Symposium, hoping for fresh guidance on the path of interest rates.

Markets currently price in about a 65% chance that the Federal Reserve will hold rates unchanged in September. At the same time, higher-than-expected US inflation has reinforced expectations of a rate hike before year-end, with the probability of such a move by December remaining above 70%.

Gold continues to find support from the so-called debasement trade – demand for assets that can protect against currency depreciation and rising debt burdens. The US Treasury’s expanded bond buyback program has intensified concerns over the country’s debt sustainability and put further pressure on the dollar.

The geopolitical backdrop also remains mixed. Oil prices remain elevated amid renewed geopolitical tensions involving Russia, despite signs of diplomatic progress in the Middle East.

Technical analysis

On the H4 XAU/USD chart, the market has formed a consolidation range around the 4,605 USD level. A move lower towards 4,511 USD is expected today, followed by a rebound to 4,605 USD and then a further decline to 4,420 USD. The MACD indicator supports this scenario, with its signal line above the centre line and trending downward, indicating continued short-term downside momentum.

On the H1 chart, the market has completed a downward move to 4,564 USD, followed by a correction to 4,600 USD. A wide consolidation range is forming above 4,564 USD. A downside breakout would open the way for a move towards 4,511 USD, with scope for a further decline to 4,500 USD. The Stochastic oscillator confirms this scenario, with its signal line below 20 and trending downward, indicating continued short-term downside pressure.

Conclusion

Gold is holding steady ahead of Fed Chair Warsh’s Jackson Hole speech, as markets seek clarity on the future path of US monetary policy. While keeping rates unchanged in September remains the base case, elevated inflation has kept the prospect of a year-end hike firmly on the table, with the implied probability remaining above 70%. Gold continues to benefit from demand linked to concerns over currency depreciation and debt sustainability, while geopolitical tensions involving Russia and developments in the Middle East add further uncertainty. Technically, the metal may see a short-term decline towards 4,511 USD and potentially 4,500 USD, while the H4 scenario points to a subsequent rebound to 4,605 USD before a further decline towards 4,420 USD. Warsh’s speech and upcoming US economic data will be key to determining gold’s next move.