Gold weakened on Friday (August 22nd) due to a stronger dollar, with the market awaiting a speech by US Federal Reserve Chairman Jerome Powell at the annual Jackson Hole symposium for further insight into the Fed's monetary policy direction.

Spot gold prices fell 0.4% to $3,326.35 per ounce at 08:17 GMT, while US gold futures for December delivery fell 0.4% to $3,368.80.

UBS analyst Giovanni Staunovo said the slightly stronger US currency played a significant role in the current decline in gold prices. A stronger dollar makes gold more expensive for foreign buyers.

The dollar index rose to a near two-week high as investors scaled back expectations for a Fed rate cut in September. Futures indicate a 71% chance of a quarter-point rate cut next month, according to the CME FedWatch tool, down from above 90% a week earlier. Non-yielding bullion tends to perform well in a low-interest rate environment.

Fed officials on Thursday appeared less enthusiastic about the idea of ​​a rate cut next month as investors prepared for Powell's speech, scheduled for 14:00 GMT on Friday.

Their comments suggest that the next US central bank meeting "will be a tense one, with some favoring a large rate cut, while others (favor) no change at all," Staunovo said.

The challenge for Fed policymakers is that despite signs of labor market weakness, inflation remains above the central bank's 2% target and could rise even higher due to aggressive rate hikes by the Trump administration.

The latest employment data showed US jobless claims rose last week by the most in nearly three months, while the previous week's jobless claims hit a nearly four-year high. Elsewhere, spot silver fell 0.4% to $38.03 an ounce, platinum fell 0.6% to $1,343.80, and palladium rose 0.2% to $1,112.85.(alg)

Source: Reuters