Gold holds steady above $1,910 ahead of Fed Chair Powell’s opening remarks at Jackson Hole. Economists at TD Securities analyze the yellow metal’s outlook.

A hawkish narrative may already be baked in

Gold markets are in the crosshairs ahead of Chair Powell's speech at the Jackson Hole symposium. 

Markets aren't expecting a change in tone, suggesting that a hawkish narrative may already be baked in. Still, markets are only penciling in 14 bps of hikes by November, and still expect more than 100 bps of cuts in 2024, suggesting that the Chair can still spark some repricing associated with the 'higher for longer' view of rates markets. 

That being said, the resilience in Gold prices against a strengthening broad USD and as rates melt higher suggest that physical demand may once again be providing a notable offset to global macro forces.