Gold retreats from peak but $4,600 support intact

Spot gold traded 1.26 per cent lower at $4,603.13 an ounce at 10:53 am PST, according to figures Mettis Global reported. That dip follows a rally of more than 5 per cent last week, which came after the U.S. Treasury widened its buying of older long-dated bonds and raised worries about the dollar losing value.

Fed Chair Kevin Warsh is due to address the annual Jackson Hole gathering in Wyoming later this week, and CNBC reported that markets are treating his comments as a guide to where policy heads next. CME FedWatch data showed traders putting a 36.5 per cent chance on a September rate increase, a probability that climbs to 72.7 per cent by December. The expectations shifted after July's annual U.S. inflation reading stayed flat rather than falling, leaving it above the Fed's 2 per cent goal for a 65th straight month.

Investors often turn to gold when geopolitical or economic risks rise, but the metal pays no yield, so its appeal tends to weaken when rates climb. Qatar's prime minister plans to visit Tehran to revive diplomatic channels after Washington and Tehran traded accusations over Washington's plan to sanction Iran's trading partners. Spot silver climbed 1.7 per cent to $69.28, while platinum added 1.1 per cent to $1,848.57 and palladium rose 0.5 per cent to $1,334.49.