Gold prices dipped Monday, a session after smashing through the $2,500 per ounce ceiling and establishing a new all-time high as investors eyed the Fed's annual symposium in Jackson Hole, Wyoming, later in the week for signals on interest rate cuts.
Gold slipped to $2,501 per ounce in early trading, down $4.39. A session earlier on Friday, the yellow metal rocketed to a new all-time high of $2,509 per ounce as investors took advantage of its safe-haven appeal due to deteriorating conditions in the Middle East and a weaker dollar.
Silver, meanwhile, continued to build on momentum from Friday's session, trading at $29.40 per ounce, up $0.43 for a gain of 1.5%.
Additionally, on Monday, The Conference Board Leading Economic Index (LEI) – which provides a snapshot of where the U.S. economy is heading in the short-term – fell by 0.6% in July to 100.4, following a decline of 0.2% in June. Wall Street estimated a drop of 0.4%. Over the six-month period ending last month, the LEI fell by 2.1% – a smaller rate of decline than its -3.1% over the six-month period between July 2023 and January 2024 – the data show.
"The LEI continues to fall on a month-over-month basis, but the six-month annual growth rate no longer signals recession ahead," said Justyna Zabinska-La Monica, the Board's senior manager of business cycle indicators. "In July, weakness was widespread among non-financial components. A sharp deterioration in new orders, persistently weak consumer expectations of business conditions, and softer building permits and hours worked in manufacturing drove the decline, together with the still-negative yield spread. These data continue to suggest headwinds in economic growth going forward."
Bullion investors will be awaiting two key events this week that could chart the Fed's course on interest rate cuts next month. The minutes of July's Federal Open Market Committee meeting are due on Wednesday, followed by Federal Reserve Chairman Jerome Powell's remarks on Friday at the annual Jackson Hole Economic Symposium in Wyoming.
As of Monday, about three-fourths of investors expect the Fed to cut rates by 25 basis points when policymakers next meet on Sept. 17-18, per the CME FedWatch Tool. Market sentiment initially priced in a bolder trim, starting at 50 basis points, but a flurry of robust economic reports in the interim prompted the revised outlook.
Nevertheless, traders remain bullish on gold's staying power.
"Despite gold having hit a new record high, we expect prices to move even higher over the coming months, with prices expected to reach $2,600 (per ounce) by the end of the year," UBS analyst Giovanni Staunovo told Reuters. "All eyes will be on Powell's speech at Jackson Hole on Friday and any indication of an imminent rate cut."
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