Gold price inches up as focus shifts to central bankers' meeting

Johannesburg-SA (Aug 23)  Gold prices edged up on Wednesday, with investors turning to the precious metal amid
political uncertainty in the United States before a major central banking conference this week.  

Spot gold was up 0.3 percent to $1,287.51 an ounce at 1107 GMT, after shedding 0.5 percent in the previous session.
U.S. gold futures inched up 0.1 percent to $1,292.80 per ounce.

"Gold's kind of hanging in there before this Jackson Hole meeting. It is in a wait-and-see mode but we should have a
better idea of direction by the end of this week," said Fawad Razaqzada, a technical analyst at FOREX.com.

"There can be an argument made for a bearish view on gold at this stage. If the dollar were to come back due to short
covering and given the rally in U.S. stocks we saw yesterday, the buck-denominated and safe haven metal could fall out of favour," he said.

Markets are turning their focus to a meeting of central bankers in Jackson Hole, Wyoming, later in the week where
Federal Reserve Chair Janet Yellen and European Central Bank chief Mario Draghi are set to deliver speeches on the outlook
for monetary policy and interest rates.           

Gold is highly sensitive to rising U.S. interest rates, as
these increase the opportunity cost of holding non-yielding
bullion, while boosting the dollar, in which it is priced.   
    "Most of the people are now looking for hints from the
Jackson Hole meeting between the central bankers," said Mark To,
head of research at Hong Kong's Wing Fung Financial Group.
    "The most important thing is economic fundamentals ...
Central banks are going to have tightening measures in monetary
policies to have normalisation. So I don't have much higher
upward momentum for prices," To said.
    The dollar inched lower after U.S. President Donald Trump
raised the prospect of a government shutdown as he tries to
force through his plans to build the wall along the border with
Mexico.            
    Gold usually fairs well in times of geopolitical
uncertainty, while stocks and the dollar generally retreat.
    Draghi is also due to give a speech in Germany later in the
day.   
    Adding to political jitters that support gold, the United
States on Tuesday imposed new North Korea-related sanctions,
targeting Chinese and Russian firms and individuals for
supporting Pyongyang's weapons programmes.             
    "On the other hand what has been supporting gold for the
last six months or so is the risk aversion," Wing Fung's To
said, referring to uncertainty around the Trump administration
in particular.
    Among other precious metals, silver rose 0.4 percent
to $17 an ounce, while platinum was flat at $975.25.
    Palladium lost 0.2 percent to $934 after touching an
over 16-year high at $940 on Tuesday.

Reuters