Metals Stocks: Gold edges lower Thursday as investors await Powell’s Jackson Hole speech

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Gold futures were tilting lower early Thursday ahead of a speech from Federal Reserve Chairman Jerome Powell and key U.S. economic metrics which could combine to serve as the next big catalyst for precious metals.

Powell’s speech, part of the annual symposium of central bankers and academics in Jackson Hole, Wyo., will be delivered via webcast at 9:10 a.m. Eastern, and could presage a change of tone by the U.S. central bank in regards to inflation.

The Fed’s new approach may allow for periods of low inflation by seeking subsequent periods of higher inflation, doing away with its traditional 2% annual target for inflation that has been a part of the central bank’s policy doctrine.

“I think Powell and other central bank heads at the Jackson Hole Symposium are likely to reaffirm their commitment for running [quantitative easing] at full throttle for a while yet,” wrote Fawad Razaqzada, market analyst at ThinkMarkets, in a Thursday research report. “If so, this should keep gold supported and keep the pressure on the dollar.”

Gold, which often is viewed as a hedge against inflation, could react, as would other asset prices, if the Fed communicates such a change. The Fed boss may also outline the length of time that the central bank is willing to hold benchmark interest rates, currently at a range between 0% and 0.25%, at superlow levels amid the COVID-19 pandemic.

December gold GCZ20, -0.08% GC00, -0.08% was off $4.10, or 0.2%, at $1,948.10 an ounce, after rising 1.5% in the previous session, helping the commodity finish at around a one-week high.

September silver SIU20, -0.41%, meanwhile, was of 7 cents, or 0.3%, at $27.375 an ounce, after surging 4.4% on Wednesday, also marking its highest settlement in about a week.

Commodity investors may also watch U.S. economic data for cues, including those for unemployment-benefit claims at 8:30 a.m. Eastern, and a revised reading of second-quarter gross domestic product at the same time, after the initial read of the official scorecard of the health of the economy showed a contraction at a 32.5% annualized pace due to coronavirus closures.