Commodity Market: Gold poised for a weekly gain supported by safe haven bets, investors eye Fed Chair Powell’s speech

Spot Gold edged higher on Friday and looked set to register a third straight weekly gain, as worsening security situation in Afghanistan fueled safe haven demand for the precious metal.

Yesterday Islamic State launched a suicide bomb attack on the crowded Kabul airport that led to the death of at least 13 US troops and scores of civilians.

“Safe-haven buying has come from rising geopolitical tensions in Afghanistan. There are some concerns about further escalation there,” ANZ analyst Daniel Hynes was quoted as saying by Reuters.

Market focus now sets on a speech by Fed Chair Jerome Powell at the Jackson Hole symposium at 14:00 GMT today for clues over the timing of the central bank’s bond purchase tapering.

“What we are looking for here is not a policy change… The Fed will set the stage for a tapering announcement perhaps next month,” DailyFX currency strategist Ilya Spivak said.

“Gold stands to be the most vulnerable, the dollar stands to benefit the most… critical support for gold is around $1,750. If that gets taken out, I can see it testing $1,700.”

As of 8:50 GMT on Friday Spot Gold was edging up 0.26% to trade at $1,796.63 per troy ounce, after earlier touching an intraday high at $1,805.21 per troy ounce. The latter has been the metal’s strongest price level since August 24th ($1,809.61 per troy ounce).

The yellow metal looked set to register its third consecutive week of gains, while being up 0.81%. Gold has retreated 1.02% so far in August, following a 2.47% gain in July.

Meanwhile, Gold futures for delivery in December were edging up 0.12% on the day to trade at $1,797.35 per troy ounce, while Silver futures for delivery in September were up 0.39% to trade at $23.642 per troy ounce.

The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was inching down 0.02% to 93.021 on Friday. Earlier in the session the DXY rose as high as 93.131, which has been its strongest level since August 23rd (93.505).

In terms of macroeconomic data, today Gold traders will be paying attention to the July report on US personal income, personal spending and Core PCE inflation due out at 12:30 GMT as well as to the final data on US consumer sentiment for August due out at 14:00 GMT.

Near-term investor interest rate expectations were without change. According to CME’s FedWatch Tool, as of August 27th, investors saw a 100.0% chance of the Federal Reserve keeping borrowing costs at the current 0%-0.25% level at its policy meeting on September 21st-22nd, or unchanged compared to August 26th.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – $1,790.13
R1 – $1,800.13
R2 – $1,808.27
R3 – $1,818.27
R4 – $1,828.26

S1 – $1,781.99
S2 – $1,772.00
S3 – $1,763.86
S4 – $1,755.72