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PRECIOUS-Gold edges lower, focus on Jackson Hole summit for rate-cut direction

Published 22/08/2019, 09:01
© Reuters.  PRECIOUS-Gold edges lower, focus on Jackson Hole summit for rate-cut direction
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* Manufacturing surveys, ECB minutes due

* Spot gold may rise to $1,524/oz -technicals

(Updates prices)

By Harshith Aranya

Aug 22 (Reuters) - Gold prices fell marginally on Thursday,

lingering around the key $1,500 level, as investors awaited the

Federal Reserve chair's speech at a global central bankers'

conclave for clues on future U.S. interest rate cuts.

Spot gold XAU= inched down 0.2% at $1,499.60 per ounce as

of 0747 GMT.

U.S. gold futures GCcv1 were down 0.5% at $1,507.60 an

ounce.

"We are seeing a holding pattern until the remarks from

Federal Reserve Chair Jerome Powell at the Jackson Hole

symposium," OANDA analyst Jeffrey Halley said.

If Powell says they are going to cut rates aggressively,

that may not be great for gold in the short-term since equities

will gain, Halley added.

Markets are now focused on Powell's speech at Jackson Hole

on Friday, for clarity on the direction of U.S. monetary policy,

especially after an inversion in the Treasury yield curve

highlighted the risk that the U.S. economy may fall into

recession.

Minutes of the Fed's July meeting, released on Wednesday,

showed policymakers were divided over whether to cut interest

rates, but were united in wanting to signal they were not on a

preset path to more easing. However, futures 0#FF: are still fully priced for a

quarter-point cut in rates next month, and over 100 basis points

of easing by the end of next year. FEDWATCH

"Indeed, Fed Funds futures still imply 50-75 bps in further

easing before year-end," said Ilya Spivak, senior currency

strategist with DailyFx.

"Investors' defiant stance probably reflects lingering hope

that the dated Minutes document will be superseded by promises

of lavish accommodation to be unveiled at the US central bank's

symposium in Jackson Hole, Wyoming."

Traders are also looking at the Group of Seven summit this

weekend for clues on what additional steps policymakers may take

to boost economic growth.

Meanwhile, hopes for U.S. fiscal stimulus got a knock when

President Donald Trump reversed course and said he was not

looking at cutting payroll taxes. A range of manufacturing surveys from across the globe are

due later on Thursday and risks are they will show a further

slowdown in activity, especially in Europe. MKTS/GLOB

Minutes from the European Central Bank's last policy meeting

are also awaited, and markets are looking for more details on

exactly when and how aggressively it might ease policy. ECB

Spot gold may rise to $1,524 per ounce as it has found a

support at $1,497, according to Reuters analyst Wang Tao.

SPDR Gold Trust (P:GLD) GLD , the world's largest gold-backed

exchange-traded fund, said its holdings rose 0.80% to 851.91

tonnes on Wednesday. GOL/ETF

The holdings have increased about 3%, or around 24 tonnes,

so far this month.

Elsewhere, silver XAG= fell 0.6% to $17.01 per ounce,

while platinum XPT= was down 0.1% to $852.

Palladium XPD= fell 0.4% to $1,465.19 per ounce.

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