Gold drifts higher, eyes on Fed Chair Warsh's comments

Gold prices edged up on Thursday as currency debasement fears lingered, according to Business Recorder. Spot gold rose 0.8 per cent to $4,630.09 per ounce by 0232 GMT, while US gold futures gained 0.7 per cent to $4,685.50. Attention has now turned to remarks Fed Chair Kevin Warsh is expected to make at the Jackson Hole symposium in Wyoming.

Gold climbed more than 5 per cent last week after the US Treasury said it would widen buying of older long-dated government debt, a step that revived dollar-debasement worries. OANDA analyst Kelvin Wong said the debasement theme, along with worries about the US budget deficit, should keep gold supported over the medium term. He added that, without specific forward-looking policy signals from Warsh, market pricing for rate hikes would likely remain largely unchanged.

Figures published on Wednesday showed US annual inflation surprisingly remained unchanged in July, far above the Fed's 2 per cent target for the 65th straight month. The CME FedWatch Tool puts the odds of a September US rate increase at 36.5 per cent, and the chance of one by December at 72.7 per cent. Silver climbed 1.7 per cent to $69.28, while platinum and palladium posted smaller gains of 1.1 and 0.5 per cent, reaching $1,848.57 and $1,334.49.