Gold edges higher as markets weigh Warsh's inflation message
Gold | 2026-07-30 03:33:30
A divided Federal Reserve left interest rates unchanged on Wednesday while Warsh reaffirmed the central bank's commitment to bringing inflation under control, leaving markets uncertain about its next policy move.
By Paul Ploumis
SEATTLE (Scrap Monster): Gold prices edged higher on Thursday, as markets assessed comments from U.S. Federal Reserve Chairman Kevin Warsh on tackling inflation after the central bank left interest rates unchanged at its latest policy meeting.
Spot gold was up 0.3% at $4,076.29 per ounce, as of 0245 GMT after rising as much as 2% on Wednesday. U.S. gold futures for August delivery gained 1% to $4,073.60.
A divided Federal Reserve left interest rates unchanged on Wednesday while Warsh reaffirmed the central bank's commitment to bringing inflation under control, leaving markets uncertain about its next policy move.
"I think the markets were surprised, and somewhat disappointed by Warsh and his general approach. He seemed kind of disengaged from the need to raise interest rates," said Marex analyst Edward Meir.
"The markets have gone up to fight inflation, but he doesn't seem to be doing much, and so this has helped gold go up."
While gold is seen as an inflation hedge, it loses its appeal as a non-yielding asset in a high-interest-rate environment.
Markets are now pricing in a 63% chance of a rate hike in September, down from about 81% before the policy decision, according to CME Group's FedWatch tool. FEDWATCH
Investors are also awaiting June's U.S. Personal Consumption Expenditure (PCE) data, due at 1230 GMT.
On the geopolitical front, the U.S. carried out fresh strikes in Iran on Wednesday, the U.S. military said, further intensifying a five-month-old war that was already expanding beyond its main fronts to embroil additional countries in the region.
Oil prices gave up some of their gains on Thursday as oil tankers continued to make their way out of the Middle East.
Gold is unlikely to sustain the latest gains for an extended period, analysts at TD Securities said in a note.
"The yellow metal is likely to drift back toward $3,900 per ounce as oil remains under pressure to move even higher through the summer."
Spot silver gained 0.4% to $57.86 per ounce, and palladium rose 1.5% to $1,264.49. Platinum fell 0.6% to $1,602.34.
Courtesy: www.reuters.com
