Gold market new
Gold rose slightly in early trading hours on Friday, with investors looking ahead to key speeches from central bank chiefs at the Jackson Hole symposium later in the day. Federal Reserve Chairwoman Janet Yellen is expected to speak as of 14:00 GMT, while European Central Bank President Mario Draghi is due at 19:00 GMT. Traders will be paying close attention to these speeches in search for hints on future monetary policy changes, including the reduction of Fed’s massive balance sheet or ECB’s QE program. On the Comex division of the New York Mercantile Exchange, gold futures were trading 0.02 percent or $0.20 up at $1,292.20 a troy ounce as of 06:45 GMT. Market analysts believe it is unlikely to receive relevant news from central bankers in this event, as the timing is simply not right for the Federal Reserve nor the European Central Bank. In its last monetary meeting, the Federal Open Market Committee reassured that in order to continue rising rates, inflation and labor market conditions would have to evolve accordingly. As for the ECB authorities, they would not rather make any announcements on monetary policy before Germany’s September elections are left behind and the political scene stabilized. Expectations for a third rate hike this year have decreased in the light of mixed FOMC minutes released last week. The document showed policymakers clearly divided over the issue, with some suggesting the normalization process can not be stopped and others warning about the consequences of moving on with further hikes in a context of low inflation. According to Fed funds tracked by CME Group’s FedWatch program, investors are pricing in a nearly 40 percent chance of a 25 basis points rate move by December. The yellow metal is sensitive to interest rate moves in US, which increase the opportunity cost of holding non yielding assets such as gold, while boosting demand for the greenback.