Spot gold ending over 1% lower on the day, traders await Fed's Powell

On a less risk-off market, spot gold ended on Wall Street lower by -1.19%  around $1,495 having travelled between a high of $1,513.26 and a low of $1,493.39.

"As global risk assets recover from a volatile week, demand for safe haven assets including global yields and precious metals are ebbing only days after the ultra bond printed an all-time record high," analysts at TD Securities noted. 

"Considering the lopsided positioning in gold, some consolidation in prices could prompt money managers to rush to the exits, but momentum indicators will likely continue to fire upside signals on all cylinders, which aligns with our view for further upside in the medium-term. That being said, the industrial precious metals could be particularly vulnerable as their industrial luster provides an additional incentive to sell the metal in the midst of a deteriorating economic outlook. "

As for futures, they too have lost ground at the start of the week. Gold for December delivery lost $12, or 0.8%, to end at $1,511.60 an ounce. Compared to September silver, however, which declined 18.2 cents, or by 1.1%, to end at $16.94 an ounce, gold remains the preferable option for investor idle capital - Indeed,  the gold and silver ratio ran higher by 0.30% on the day between 88.15 and 88.75. 

Gold traders await the Jackson Hole Symposium

Looking ahead, markets await the Jackson Hole Symposium and where Powell is placed with respect to the Federal Reserve's next move which will be key in determining rates and the price of the Dollar which will have consequences for the price of gold. The market will be looking for signs that the Fed is willing to cut rates more than warranted by a "mid-cycle adjustment" in policy. Investors will also be watching for any signs of change in the Fed's inflation framework. However, analysts at TD argued that it may be a disappointment:

"We don't think that the Fed will provide much new information on either front. Jackson Hole is an academic conference and not the appropriate forum to announce a change in policy. The Committee is also divided on the outlook for rates and the impact of weak global growth and trade uncertainty on the US remains uncertain."

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