Kevin Warsh's remarks were read as leaning toward holding rates steady at next week's meeting, and traders dialed back bets on a hike to less than one in five. That pause in hawkish positioning checked the dollar's advance and gave bullion some breathing room.
At 7:35 a.m. in Singapore, spot bullion stood at $4,180.97 an ounce, up 0.4%, and hovered near $4,180 after a 0.7% drop the previous week. Silver added 0.6% to $57.33, and platinum and palladium also climbed. After a 0.3% slide last week, the Bloomberg Dollar Spot Index was roughly unchanged.
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A hot US inflation reading last week had lifted expectations for further tightening and supported the dollar, but Warsh's comments stalled that momentum. Gold has stayed above the key $4,000 support since August, with haven demand helping after a war-driven drop pushed it into a bear market earlier this year. Even so, prices remain roughly 20% lower than before the US-Iran conflict flared in late February.
Higher rates are a drag on gold because the metal does not yield interest. With the odds of a near term hike retreating, the immediate headwind looks softer, but the inflation backdrop and the dollar's path still matter for direction from here.
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