Gold climbed above $4,600 an ounce as market participants focused on the Federal Reserve's interest-rate decisions, particularly with the annual Jackson Hole gathering approaching. Bullion increased by as much as 1.1%, recovering most of the prior session's losses. The metal's five-day winning streak ended on Wednesday after new data revealed that US inflation remained significantly above the Fed's target, raising the possibility of a rate hike. Following this news, the dollar experienced its largest jump in two weeks, and bond yields also rose.
Despite the recent inflation data, gold has seen a substantial rebound this month, rising approximately 14%. This surge was partly driven by the US Treasury's unexpected intervention in the bond market last week. Efforts to manage the US debt pile have reignited interest in the "debasement trade," which previously fueled gold's record rally as investors sought a hedge against large budget deficits and a weakening dollar. This strong performance has pushed gold above its 200-day moving average, a key indicator of momentum. Investor participation is also broadening, with bullion-backed exchange-traded funds tracked by Bloomberg adding over 28 tons last week, the highest increase since January.
Investors are now eagerly awaiting clues regarding the Fed's approach to inflation, particularly from Chairman Kevin Warsh's inaugural major speech on Friday at the Jackson Hole symposium. This speech provides Warsh an opportunity to address criticisms about his perceived lack of transparency on economic views. As of 7:38 a.m. in Singapore, gold gained 0.6% to $4,619.54 an ounce, with silver advancing 1.3% to $68.99 an ounce. Platinum and palladium also registered gains, while the Bloomberg Dollar Spot Index, a measure of the dollar's strength, slightly decreased by 0.1% after a 0.2% rise in the previous session.
