Fed Outlook and Jackson Hole Speech Hold the Cards
The Federal Reserve’s upcoming decisions remain a primary driver for precious metals. The CME FedWatch tool shows traders pricing in an 80% chance of a rate cut at the next meeting. However, the most recent FOMC minutes reveal internal disagreement. Dovish voices exist — notably Governors Waller and Bowman — but the committee’s tone has grown more cautious due to lingering inflation concerns and a still-tight labor market.
Powell’s Friday appearance at Jackson Hole is expected to either reinforce rate-cut optimism or force a repricing of risk. Societe Generale’s Kenneth Broux warned that if Powell leans hawkish, bond yields could rise and the dollar may extend gains, placing pressure on precious metals across the board.
Labor and Manufacturing Data Weigh on Sentiment
This week’s jobless claims added to the growing sense that the labor market is cooling. Initial claims rose to 235,000, exceeding expectations and marking the highest level since June. Continuing claims also climbed to 1.97 million — a signal that more unemployed workers are staying out of jobs longer.
Meanwhile, the Philadelphia Fed’s Manufacturing Business Outlook Survey saw new orders drop into negative territory and general activity contract for the first time since April. Input costs remain high, with 71.4% of firms expecting their competitors to raise prices within three months. This stickiness in price pressures complicates the Fed’s rate decision calculus and continues to underpin volatility in metals.
Gold Struggles Against Resistance, Signaling Caution for Silver
Gold’s performance offers a cautionary parallel. The yellow metal failed to breach resistance at $3353.58, slipping under the 50-day moving average as dollar strength and Treasury yields capped upside attempts. Until Powell confirms a dovish policy tilt, gold remains vulnerable to further downside — a signal that silver bulls should temper near-term expectations unless dollar weakness emerges.