Gold edged higher as traders weighed the outlook for US monetary policy ahead of a key speech by Federal Reserve Chairman Jerome Powell later this week.

Gold bullion prices traded near $3,330 per ounce as the market awaited clues from Powell's annual speech in Jackson Hole, Wyoming, on Friday. Swaps predict a high probability that the Fed will cut borrowing costs by a quarter point next month. Lower interest rates benefit gold because it doesn't pay interest.

However, the Fed's monetary easing path was complicated by higher-than-expected inflation figures last week, which caused some traders to scale back expectations for a rate cut. Facing growing pressure from President Donald Trump for a significant reduction, Powell has expressed concern about import tariffs at the highest level in a century.

The market is also closely monitoring US and European efforts toward a crucial meeting between Presidents Vladimir Putin and Volodymyr Zelenskiy. Signs of a Russia-Ukraine ceasefire could ease demand for the precious metal as a safe-haven asset, but a peace agreement remains elusive.

Gold has risen more than a quarter this year, as trade war concerns and geopolitical tensions have boosted its appeal as a safe-haven asset, while central bank buying and inflows into exchange-traded funds (ETFs) have also provided support. Although it has traded in a relatively tight range since hitting a record around $3,500 in April, banks such as UBS Group AG and Citigroup Inc. expect further gains.

Spot gold rose 0.4% to $3,329.69 an ounce as of 12:22 p.m. in London. The Bloomberg Dollar Spot Index was flat. Silver and palladium fell, while platinum gained. Among base metals, copper fell 0.2% to $9,675.50 a ton on the London Metal Exchange. Aluminum and zinc gained slightly. (alg)

Source: Bloomberg