WASHINGTON (dpa-AFX) - Gold prices ended roughly flat on Monday as the dovish remarks from the Federal Reserve Chair Jerome Powell last Friday indicating rate cuts kept market sentiment high amid a strengthening US dollar.
Front Month Comex Gold for August delivery edged down 60 cents (or 0.02%) to $3,373.80 per troy ounce today.
Front Month Comex Silver for August delivery fell by 32.60 cents (or 0.84%) to $38.677 per troy ounce today.
While delivering a speech on 'Economic Outlook and Framework Review' at the annual Jackson Hole Economic Symposium in Wyoming last Friday, Powell conceded that downside risks to the job market were on the rise and added that with policy in restrictive territory, the baseline outlook and the shifting balance of risks 'may warrant' adjusting the Fed's policy.
Powell also pointed to the recent aggressive changes in tax, trade and immigration policies by the US government as predominant factors that would reshape the economic landscape.
Powell's discourse ignited a bond and stock market rally on Friday as traders construed the remarks as a subtle indication of an upcoming interest rate cut in September. His concerns weighed on the dollar and lifted the precious yellow metal.
According to the CME group's FedWatch Tool, investors are currently betting on an 86.2% chance of a 25-basis-point rate cut.
Generally, a lower interest regime by the Fed bodes well for non-yielding assets such as gold.
As investors continued to assess the outlook of the Federal Reserve's possible stance, the US dollar has climbed today.
However, gold held onto the gains made on Friday, edging only slightly lower as expectations of easing monetary policy remained strong.
On the economic front, the Chicago Fed National Activity Index (CFNAI) edged down to -0.19 in July from a revised -0.18 in June.
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