BULLION LATEST 23/08: Stronger dollar checks gold’s gains; focus on Jackson Hole

The spot gold price was marginally higher during Asian morning trading on Wednesday August 23, but gains were checked by a stronger dollar. Meanwhile, investors remain focused on the Jackson Hole Symposium in the USA later this week, where a number of central banking officials will speak.

The spot gold price was quoted at $1,286.05-1,286.35 per oz as of 04:18 BST, up $2.40 on the previous day’s close. Trade has ranged from $1,282.85-1,287.15 so far.

  • Gold struggled to hold on to gains from the previous day as the dollar strengthened, while expectations that US president Donald Trump would enact new tax cuts also weighed on investor appetite for the yellow metal, ANZ Research noted.
  • “Gold gave up all its previous day’s gains, closing at $1285.00 overnight, as the US dollar and stocks strengthened overnight. A deeper correction in the short term cannot be ruled out although in the bigger picture gold’s price action remains constructive,” Jeffrey Halley, senior market analyst at Oanda said.
  • Investors continue to focus on the upcoming Jackson Hole Symposium later this week – comments from central banking officials at the summit will be keenly watched by investors, particularly US Federal Reserve chair Yellen’s views on inflation – a persistently low inflation environment in the USA has cast doubts on the Fed’s ability to raise interest rates this year.

Silver, PGMs

  • In the other precious metals, the spot silver price rose $0.085 to $17.010-17.035 per oz as of 07:25 BST.
  • Platinum was up $4 at $974-979 per oz and palladium was unchanged at $924-929 per oz as of 04:18 BST.
  • On the Shanghai Futures Exchange, gold for December delivery was at 279 yuan ($41.89) per gram, and the December silver was at 3,966 yuan per kg as of 04:18 BST.

Currency moves and data releases

  • The dollar index was down 0.02% at 93.49 as of 04:18 BST.
  • In other commodities, the Brent crude oil spot price rose 0.09% to $51.66 per barrel while the Texas light sweet crude oil spot price was down 0.08% to $47.66
  • In equities, the Shanghai Composite fell 0.37% to 3,277.91.
  • In EU data on Tuesday, the German ZEW economic sentiment was recorded at 10.0 for August, down from 17.5, while ZEW economic sentiment was down from 35.6 to 29.3. China’s CB leading index came in at 0.9%, down from 1.6% the previous month.
  • The economic agenda is busy today with flash manufacturing and services PMI data out across Europe and the USA, as well as EU consumer confidence and US new home sales and crude oil inventories of note.
  • In addition, European Central Bank president Mario Draghi and US Federal Open Market Committee member Robert Kaplan are speaking.