By Osama Al Saifi, Managing Director for MENA at Traze.com
Gold prices traded within a tight range on Tuesday, as investors balanced geopolitical developments with expectations for US monetary easing. The market could see limited movements ahead of Chair Jerome Powell’s remarks at Jackson Hole later this week. Market positioning reflects a strong belief in further rate cuts, with an 84% probability of a 25-basis-point reduction in September. However, the market could strongly react to any new hints from the Federal Reserve.
In the meantime, the market continued to find some support from ETF demand. Global gold ETFs recorded net inflows of 9.9 tonnes during the week ended on August 15, led by investments in Europe and North America, while Asia saw outflows.
However, gold’s upside potential could be limited. US President Donald Trump signaled progress in diplomatic efforts after meetings with Ukrainian President Volodymyr Zelenskiy and Russian President Vladimir Putin. Hopes of arranging a trilateral summit raised cautious optimism over a potential framework for peace, which could weigh on gold prices.
Meanwhile, reports that Hamas accepted a new ceasefire proposal briefly eased geopolitical concerns, but ongoing Israeli military operations in Gaza and uncertainty over Israel’s response underscored that risks could remain elevated.
In addition, Uganda inaugurated its first large-scale gold mine and is expected to produce 1.2 tonnes of refined bullion annually. The additional output could contribute to some limited selling pressure.