Gold Climbs Higher as US Yields Soften Ahead of Traders Awaiting Fed Chair Warsh Speech

Spot gold attracted fresh buying during the Asian session on Thursday, currently trading near $4,625.63, showing a clear upward trend intraday. The price had previously retreated to a weekly low in the $4,583 region, but softer US Treasury yields provided support for the non-yielding asset gold, driving a rebound.

**Market Focuses on Warsh Policy Signals**

Markets are closely watching Federal Reserve Chair Warsh's keynote speech at the annual Jackson Hole economic symposium on Friday. According to Reuters, this marks Warsh's first appearance at the conference since taking office, with investors seeking clear signals on the future rate path from his remarks. US inflation has remained above the 2% target for years, and some Fed officials worry that failing to raise rates further could damage the central bank's credibility, keeping Warsh's stance under close scrutiny.

**Softer Yields Provide Short-Term Boost**

The recent pullback in US bond yields has become a direct catalyst for gold's short-term upside. Sentiment has turned cautious ahead of Warsh's speech, with some funds flowing into the gold market. However, analysts noted that Warsh may use this opportunity to articulate his views on monetary policy principles rather than provide specific short-term policy guidance. Michael Gregory, deputy chief economist at BMO Capital Markets, said in a note to clients that Warsh's first press conference would be "must-see TV," reflecting high market expectations for clear policy communication.

**Inflation Outlook vs. Rate Hike Expectations**

Despite gold's intraday gains, expectations that the Fed's policy rate needs to stay elevated remain a point of contention. Warsh has previously vowed to pursue "institutional reforms," including adjusting communication methods and balance sheet size. James McCann, senior economist at Edward Jones, said markets are open to Warsh's remarks and policy stance, and unexpected outcomes could emerge this week. If Warsh signals a stronger anti-inflation stance, it could limit further upside for gold.