Gold approaches three-week low

Gold traded around 3,320 U.S. dollars per ounce on Wednesday, hovering near a three-week low as easing geopolitical concerns and a firmer dollar pressured the precious metal in the run-up to the Federal Reserve’s Jackson Hole symposium.

The pullback comes after a volatile month in which gold initially rallied on tariff-driven inflation fears, only to retreat as traders reassessed the likelihood of a swift resolution to ongoing geopolitical risks.

On the political front, U.S. President Donald Trump reiterated that Washington would not deploy ground troops to Ukraine, though he left open the possibility of providing limited air support as part of broader peace efforts.

Ukrainian President Volodymyr Zelenskiy welcomed renewed dialogue and expressed optimism about the upcoming talks, but Russia has yet to confirm participation, leaving uncertainty about the prospects for a durable ceasefire. Any meaningful breakthrough could further reduce demand for gold as a safe-haven hedge, while continued ambiguity may help to limit losses.

Attention is firmly on monetary policy. Investors are awaiting Fed Chair Jerome Powell’s speech at Jackson Hole for guidance on the trajectory of U.S. interest rates, particularly after July’s inflation data showed price growth holding below expectations at 2.7 percent.

Later today, the release of the Federal Open Market Committee’s July meeting minutes is expected to shed light on the depth of divisions among policymakers. Markets currently anticipate two quarter-point rate cuts before year-end, with the first move likely in September, though some traders are betting on a more aggressive half-point cut if labor market weakness deepens.

Beyond short-term drivers, gold continues to be supported by structural demand. Central banks, particularly in emerging markets, have been steady net buyers, diversifying reserves amid trade frictions and long-term concerns over dollar stability. Meanwhile, China extended its gold purchasing streak in July, marking the ninth consecutive month of reserve accumulation, underscoring ongoing official-sector interest.

In the broader investment landscape, gold faces competition from U.S. Treasuries as easing inflation expectations stabilize real yields. ETF flows have also slowed after strong inflows earlier this year, reflecting investor hesitation ahead of a potentially pivotal Fed signal. However, if Powell confirms an imminent easing cycle, the appeal of non-yielding assets such as gold could rebound quickly, potentially reversing part of the recent selloff.