Gold Prices Dip as Traders Await Fed Chair's Jackson Hole Speech

Gold prices edged lower on Friday, putting the metal on track for its first weekly decline in a month as investors adopted a cautious stance ahead of a pivotal speech by Federal Reserve Chair Kevin Warsh.

Prices Retreat from Three-Month High

Spot gold fell 0.4% to $4,584.30 an ounce, while U.S. gold futures traded 0.6% lower at $4,638.41 in early trading, according to Investing.com data. The decline positions the precious metal for a 0.4% weekly loss, breaking a three-week winning streak.

The pullback follows a recent rally that saw bullion touch a three-month high near $4,700 an ounce earlier in the week. That move was partly fueled by concerns over U.S. fiscal policy and Treasury actions supporting longer-dated bonds.

Jackson Hole in Focus

Market attention is now firmly centered on the Federal Reserve's annual economic symposium in Jackson Hole, Wyoming. Fed Chair Kevin Warsh is scheduled to deliver his first major address in the role at 10 a.m. ET.

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Investors will be closely analyzing his remarks for any new signals on the central bank's view of inflation and the future path of U.S. interest rates. The speech is seen as a key event for determining market direction.

Inflation and Rate Hike Outlook

Recent economic data has complicated the outlook for monetary easing. The personal consumption expenditures (PCE) price index, the Fed's preferred inflation gauge, rose 3.7% in the year through July, adding to bets that the central bank may need to act further.

According to the CME FedWatch tool, markets are pricing in a 34% probability of a rate hike in September and a 74% chance of an increase by December. Higher interest rates typically weigh on gold, as they raise the opportunity cost of holding the non-yielding asset.

Despite Friday's dip, gold has had a strong month, gaining more than 13% in August. Other precious metals also declined, with silver falling 0.4% and platinum slipping 0.3%.