Gold price moves sideways as investors await key economic data

After a strong recovery, the price of gold has levelled out as investors look for new reasons to take action. At the time of writing, the precious metal is selling for $1921.51 per ounce. At the Jackson Hole Symposium, Fed Chair Jerome Powell reaffirmed that future policy decisions will be based on facts.

Powell stated that there is still a long way to go until price stability is achieved, and policymakers will exercise extreme caution in upcoming policy sessions. Powell also emphasised that new data will play a significant role in future policy decisions. Inflation is showing symptoms of becoming more responsive to labour markets, according to the central bank, and further indications of a tighter labour market may call for additional Fed action.


Even with more encouraging recent readings, Powell stated that “inflation remains too high” and that “the process of bringing inflation down still has a long way to go.” President of the Cleveland Fed Bank Loretta Mester is in favour of another increase in interest rates, though perhaps not in September.

There is a more than 80% chance of the Fed keeping interest rates unchanged in September, while the majority of investors are betting on an interest-rate hike in November. Fed Mester is in favor of re-evaluating the rate cut discussions in the second half of 2024, believing that the central bank has a good shot at attaining 2% inflation without damage to the real economy.

The United States Nonfarm Payrolls (NFP) and ISM Manufacturing PMI data for August will continue to be in the spotlight this week, as Jerome Powell stressed the dependence on incoming data for additional policy action.

Although hiring in the US has slowed recently, the unemployment rate has remained at a historic low, and wage growth has been robust. In the US, businesses are operating at lesser capacity due to a gloomy demand outlook and are cleaning out their old inventories as growth plans have been delayed due to rising financing costs, which has resulted in a nine-month stretch of declining factory activity. As investors get ready for important economic figures, the US Dollar Index is still supported around 104.00.