Gold edges higher as markets weigh Warsh's inflation message after Fed decision

Gold prices edged higher on Thursday, as markets assessed comments from U.S. Federal Reserve Chairman Kevin Warsh on tackling inflation after the central bank left interest rates unchanged at its latest policy meeting.

FUNDAMENTALS

Spot gold was up 0.4% at $4,080.38 per ounce, as of 0103 GMT. ‌U.S. gold ⁠futures ⁠for August delivery gained 1.1% to $4,078.

A divided Federal Reserve left interest rates unchanged on Wednesday, while Warsh reaffirmed the U.S. central bank's commitment to bringing inflation under control, leaving markets uncertain about its next policy move.


Markets are now pricing in a 57% chance of a rate hike in September, down ⁠from about ‌81% prior to the policy statement, according to CME Group's FedWatch tool. [FEDWATCH]

Investors are also awaiting June's ⁠Personal Consumption Expenditures (PCE) data, due later in the day, for further clues on the Fed's policy path.

The Bank of England and the Bank of Japan are also widely expected to keep rates unchanged this week and caution against inflationary pressures linked to the Middle East war.

A drone hit a U.S.-owned gas storage tanker ‌at Egypt's Mediterranean port of Damietta, British maritime security firm Ambrey said in an initial assessment on Wednesday, and U.S. President Donald ⁠Trump vowed to retaliate against Iran for an overnight attack, as the Middle East conflict appeared to expand beyond its main fronts.

Spot silver gained 1% to $58.20 per ounce, platinum inched 0.3% higher to $1,616.84, and palladium rose 1.9% to $1,270.50.

DATA/EVENTS (GMT)

1100 UK BOE Bank Rate July

1200 Germany CPI, HICP Prelim YY July

1230 US Consumption, Adjusted MM June

1230 US Core PCE Price Index MM, YY June

1230 US PCE Price Index MM, YY June

1230 US GDP Advance Q2

1230 US Initial Jobless Clm 25 July, w/e