GoldPrice.

Happy Friday, traders. Welcome to our weekly market wrap, where we take a look back at these last five trading days with a focus on the market news, economic data, and headlines that had the most impact on gold prices and other key correlated assets—and may continue to into the future. 

Despite a very hawkish summer holiday for the FOMC in Jackson Hole, gold prices are closing our Friday in the red for the day but in the green—and critically above previous resistance—for the week. 

So, what kind of week has it been?

Gold prices have been steered around by the Fed this week— more specifically, by the broader markets’ perception and projections of the Fed’s policy planning— more directly than any other in 2023. This is largely down to our being in the deepest depths of the summer lull, finding a week with virtually no economic data of relevance at the same time as the most powerful individuals for global monetary policy have all gathered in one place (for the annual Jackson Hole Symposium.) To be sure, the most momentous point of this week didn’t arrive until Friday morning when Federal Reserve Chair Jerome Powell took to the podium for the keynote address in Jackson. The thrust of Powell’s remarks was unambiguously negative for gold valuations, but to more accurately assess the weekly performance of the precious metal, we do need to take note of the trading in the sessions leading up to Jackson Hole.  

One thing that always makes Jackson Hole different from key Fed officials gathering for a full FOMC meeting is that, although the announcements, commentary, and decisions (or lack thereof) that can come from the Symposium are no less important or impactful, less formality to the proceedings also tends to bring with it a greater feeling of uncertainty about what the Fed as a body, or what individual FOMC participants getting in front of a camera might say. This uncertainty was a strong positive play for the gold market this week, leading up to Friday. While a temperature check would have shown that most investors and analysts expected a mostly hawkish output from Powell & Company, it was clear that the market as a whole was not entirely sure. Clear, because through most of the week, the US Dollar weakened as traders appeared to be hedging their bets on continued hiking from the Fed, which has been the key driver of 2023’s massive bull run for the Greenback. Clear, most notably, because alongside the Dollar fell US Treasury Yields— sharply. This opened a great deal of headroom for gold prices to rise with lighter resistance, and traders took advantage, bidding the metal steadily higher. After spot prices broke back above $1900/oz in overseas trading Tuesday evening, the US market open on Thursday morning delivered the strongest rally for gold on the week as the chart climbed near to $1915 before settling. The move capped off the strongest and longest upward climb for gold in several weeks. 

Which, come Friday, was a big help for gold prices. Because, between describing the positive trend in inflation data this summer as “just the beginning” and firmly staking out the Fed’s facility and willingness to continue hiking through (at least) the end of the year, both the US currency and the yields on its Treasury paper have been revived, trending strongly higher through Friday’s trading. In response to both the news from Wyoming and the currency/bond market moves, gold prices dipped quickly. Here, the steady and strong gains made earlier in the week served gold well, as support (somewhat surprisingly) stepped in around $1905 to not only slow the fall but encourage a rebound that has lifted gold to an end-of-week pause at $1913/oz.  

All things said, and against all odds, this has been a green week for hold. Whether it’s the start of a late-summer rally will remain to be seen next week, as we have another quiet four days that culminate in a Friday highlight: the August Jobs Report.  

For now, traders, I hope you can get out and safely enjoy your weekend for the next couple of days. After that, I’ll see everyone back here on Monday for another gold market recap.