? Gold hovers near record highs after dovish Powell's comments

Gold (XAU) traded close to record levels after Federal Reserve (Fed) Chair Jerome Powell's dovish comments at the Jackson Hole symposium.

? Possible effects for traders

In his Jackson Hole speech last Friday, Powell suggested that the Fed is ready to adjust its monetary policy, with the timing and scale of rate cuts depending on upcoming economic data. He also highlighted that risks in the job market have increased while inflation risks have diminished. The regulator now feels more assured that inflation is nearing its 2% target, bolstering the case for lowering the base rate. Markets are currently divided on whether the Fed will opt for a 25 or a 50-basis-point (bps) cut at its September meeting. Overall, investors anticipate a total of 100 bps rate cuts until the end of the year, which would reduce the opportunity cost of holding non-yielding assets such as gold.

Additionally, rising geopolitical tensions in the Middle East and ongoing economic uncertainty are expected to increase safe-haven demand, which could support gold prices. However, the weak demand in China's economy, the world's largest gold producer and consumer, may offset these gains and put downward pressure on the metal.

XAUUSD fell during the Asian and early European trading sessions. Today, traders should focus on the release of the U.S. Durable Goods Orders report at 12:30 p.m. UTC. Lower-than-expected figures should positively impact XAUUSD, potentially pushing the price back above $2,520. However, the bearish trend in the pair may continue if the figures are better than expected. ‘Spot gold may rise to $2,559 per ounce, as it has completed a pullback towards a triangle’,