Gold prices rose on Wednesday on the eve of a speech from Federal Reserve Chairman Jerome Powell, bouncing off a two-week low hit early in the session as investors bet on further economic stimulus to mitigate the impact of the coronavirus pandemic.
Spot gold rose 0.5% to $1,938.08 per ounce by 10:47 am EDT (1447 GMT), after declining 1%. U.S. gold futures rose 1.4% to $1,950.50.
“Expectations are that there is more stimulus coming. A change in direction from the Fed that supports stimulus measures will be very bullish for gold,” said Bob Haberkorn, senior market strategist at RJO Futures.
“Investors are waiting for something to come from the U.S. Treasury, and waiting for congress to come to an agreement.”
Powell was to speak at a virtual Jackson Hole symposium on Thursday, where he was expected to offer more insight on the U.S. central bank’s strategy on inflation and monetary policy.
Last week’s Fed minutes gave few clues about whether a shift to easier policy is possible in coming months.
Investors were also watching U.S. coronavirus aid negotiations. U.S. Treasury Secretary Steven Mnuchin will testify before a House of Representatives panel next week.
Global central banks and governments have released massive stimulus to prop up their economies from the impact of the pandemic. This has pushed gold up about 27% so far this year as it is seen as a hedge against inflation and currency debasement.
“There are still a lot of concerns about the economy and they continue to indicate that rates are going be low and stimulus measures will continue, which should boost gold,” said ANZ analyst Daniel Hynes.
Elsewhere, silver rose 1.7% to $26.87 per ounce, platinum eased 0.1% to $925.76 and palladium was up 0.9% to $2,183.49.
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