Gold price edges off 4-week low, awaits clues on Fed policy

London (Aug 25)   Gold edged off the previous day's four-week low on Thursday as the dollar retreated, but prices were rangebound ahead of a speech by Federal Reserve Chair Janet
Yellen this week which will be watched for clues on monetary policy.

Investors are hoping Yellen will give a clearer signal on the path of interest rate hikes when she addresses a meeting of central bankers in Jackson Hole, Wyoming, on Friday.

Gold is highly sensitive to rising U.S. rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.

Spot gold was up 0.1 percent at $1,324.11 an ounce at
1131 GMT, while U.S. gold futures for December delivery
were down $2.60 an ounce at $1,327.10.
    Strong U.S. employment readings have led some to speculate
that rates could rise as soon as September, though mixed
messages from the bank's latest gathering have clouded the
outlook.
    Minutes from the U.S. central bank's July 26-27 policy
meeting showed broad agreement that more economic data is needed
before raising interest rates, but recent comments from other
policymakers have been much more hawkish.
    "After the Fed minutes, gold reacted quite positively, and
then a few days later there were comments from some officials
saying actually the Fed should press ahead with a rate hike,"
Capital Economics analyst Simona Gambarini said.
    "That weighed on the gold price. Now what we're seeing is a
bit of a wait-and-see mode, where markets are just monitoring
the situation and waiting for further comments that might move
the market."
    The dollar edged lower ahead of the Jackson Hole meeting.
The CME Group's FedWatch tool showed futures markets indicate an
18 percent chance the Fed will hike rates at its policy meeting
next month, and around a 50 percent chance of an increase in
December.
    Expectations that the Fed will hold off on further rate
hikes are a major factor in gold's 25 percent rally this year.
     Top consumer China's net gold imports via main conduit Hong
Kong rose 28.6 percent in July, data from the Hong Kong Census
and Statistics Department showed on Thursday.
    Silver was up 0.2 percent at $18.55 an ounce, after
hitting an eight-week low of $18.46 earlier in the session.
    Platinum and palladium were up 0.5 and 0.1
percent at $1,077.30 and $682.50 respectively, after touching
their lowest in more than four weeks on Wednesday.
    "The platinum group metals (PGMs) fell harder than gold,
possibly due to thinner trading conditions," HSBC said in a
note.

Source: Reuters