Gold is trading softer in Thursday’s London session, slipping toward $3,338 after failing to break above the $3,350 resistance level. The move comes as investors shift focus to preliminary US manufacturing and services PMI readings later today, which are expected to offer fresh direction ahead of Federal Reserve Chair Jerome Powell’s closely watched address at Jackson Hole on Friday.
The dollar’s rebound has capped gold’s recovery from three-week lows near $3,311 yesterday. Minutes from the Fed’s July policy meeting showed that only two officials supported a rate cut last month, lending temporary support to the greenback. Still, that stance looks increasingly outdated given the weaker jobs and inflation data that have since reinforced market conviction for at least two cuts before year end.
Political risks also weighed on the dollar midweek after President Donald Trump called on Fed Governor Lisa Cook to resign over alleged disclosure violations. Cook rejected the demand, insisting she would not be pressured to step down, as questions over the Fed’s independence rattled investors and briefly lifted gold.
Now, attention turns to US PMI data, which will serve as the final test before Powell’s Jackson Hole remarks. A weak read would strengthen the case for easing, boosting gold, while an upside surprise could stall rate cut bets and extend the dollar’s rebound. Markets expect Powell to maintain a cautious tone, signaling readiness to act if growth slows further but avoiding commitment to aggressive cuts, particularly as tariff-driven inflation risks remain on the radar.
Gold faces near-term volatility, with traders likely to square positions ahead of Powell’s speech. Today’s PMI figures could set the tone for both dollar and bullion, making them a critical pivot for market execution decisions.
Disclaimer: This report is for informational purposes only. It does not constitute investment advice or represent the official views of any central bank or regulatory body.