On Monday, gold rose and held steady as the attention of investors shifted to the Washington meeting between Trump, EU leaders and Zelenskiy on how to move the peace talks forward between Russia and Ukraine. Traders are also waiting for the outcome of the upcoming meeting of central bank leaders at Jackson Hole. Chairman Powell is expected to make his final address to this meeting on Friday.
EU leaders and President Zelenskiy arrived in Washington yesterday and they are scheduled to have a meeting with Trump, with a private meeting between Zelenskiy and his host taking place before the general meeting between all the assembled leaders.
The purpose of this meeting is to discuss what transpired during last week’s meeting between Trump and Putin in Alaska on Friday. Given that no meeting of the U.S. FOMC is planned for this month, the discussions at Jackson Hole will provide needed pointers on the possible decision likely to be made when the FOMC meets next month to either retain the existing Fed rate or make a cut to the benchmark rate.
During last year’s Jackson Hole meeting, Jerome Powell had revealed that the time had come to start making interest rate cuts, and the Fed had gone ahead to make good on that statement. Traders are therefore waiting to hear what Powell will say at this year’s Jackson Hole sitting of top economists and central bank leaders.
Yesterday, spot gold recorded a 0.4% uptick to reach $3,348 an ounce while yields on 10-year treasuries dropped by 2bps from the highest level they had attained in the previous fortnight. This particular treasury is generally regarded as the benchmark for financial, government and commercial borrowing entities.
Gold’s uptick comes in the wake of a price drop last week arising from the inflation data released depicting higher robustness than had initially been expected. This data tamped down expectations that the Fed would reduce its benchmark rate during the upcoming meeting. The data announced on Thursday indicated that producer prices in the U.S. had risen a lot faster in July than markets expected. This is in contrast to consumer prices that held steady, bucking expectations given the current tariff environment.
Based on that data, market expectations for a rate cut dropped to 85% as traders foresaw a lower likelihood of a cut given the rising producer prices. A lot is therefore riding on the meeting at Jackson Hole and the one being hosted by Trump in Washington. Gold industry actors like Torr Metals Inc. (CVE: TMET) Will be watching these two meetings that could influence the trajectory of the price of gold in the short term.
NOTE TO INVESTORS: The latest news and updates relating to Torr Metals Inc. (CVE: TMET) are available in the company’s newsroom at https://ibn.fm/TMET
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