Gold Rises as Traders Weigh Fed Rate Path After Warsh Remarks

Gold rose as traders weighed the outlook for US monetary policy following Federal Reserve Chairman Kevin Warsh ’s remarks at an annual central banker gathering.

Bullion climbed as much as 2.7% as the dollar and bond yields pared gains. Warsh repeated that he isn’t going to offer “forward guidance” with regard to upcoming rate policy, marking a step-change at the Fed, he said Wednesday at the European Central Bank’s annual Forum on Central Banking in Sintra, Portugal. He also said price risks have in recent weeks, while repeating his determination to bring inflation back to the US central bank’s 2% target.

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“Mr. Warsh is staying on message, which is helping gold. Gold traders were fearing that he may come in a bit more hawkish,” said Bart Melek , global head of commodity strategy at TD Securities.

After setting a record in January, the metal has been hurt by speculation that the Fed may hike rates this year to tackle sticky inflation, despite the declines seen in energy costs following the interim US-Iran peace deal. Higher borrowing costs are a headwind for non-yielding metals.

The latest US data continued to point to the strength in the US economy. Manufacturing activity expanded for a sixth straight month as a war-driven surge in input costs cooled. Private-sector job creation was solid again in June, capping the best three-month stretch for hiring in more than a year.

Traders will watch for payrolls data due Thursday that may shed a light on what the next step might be for the Fed. The government’s payrolls report is expected to show US employers added 115,000 jobs in June. That would mark the strongest six-month stretch for hiring since mid-2024.

Spot gold traded 1.4% higher to about $4,064.41 an ounce at 3:03 p.m. in New York. The , a gauge of the US currency, rose 0.2%. Silver gained 2%. Platinum and palladium both advanced.