The price of gold fell by 0.4%, retreating from a record high, which was caused by the strengthening of the US currency and the correction of positions by investors ahead of the speech by Fed Chairman Powell.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.18% to 101.22.
Meanwhile, the minutes of the Fed's July meeting, presented yesterday, signaled that the Central Bank is ready to begin easing monetary policy at the September meeting. According to the CME FedWatch Tool, markets see a 34.5% probability of a 0.5% rate cut in September (up from 25% the week before), and a 65.5% probability of a 0.25% rate cut (down from 75.0% the week before). A low interest rate environment tends to boost non-yielding bullion's appeal.
Investors are now awaiting the Jackson Hole Economic Symposium starting Thursday, with Fed Chair Jerome Powell set to speak on Friday. Market participants expect additional clarity on the likely rate cut next month and whether the cost of borrowing will decrease at each subsequent Fed meeting.
Meanwhile, today the focus will be on the initial jobless claims report for the past week. Consensus estimates suggest that initial jobless claims rose to 230 thousand from 227 thousand a week earlier. Experts warn that gold prices may get an additional boost if today's data softens further after recent downward revisions to payroll figures.