Gold’s attention will turn to Wednesday’s release of Federal Open Market Committee meeting minutes and to Friday’s speech by Federal Reserve Chair Janet Yellen in Jackson Hole, Wyoming. “Gold is historically sensitive to changes in monetary policy and expectations for changes in monetary policy. A perceivably dovish FOMC meeting minutes or speech by Ms. Yellen would be gold positive while a perceivably hawkish interpretation would be bullion negative, in our view. We expect a pick-up in gold volatility, as measured by the Gold ‘VIX,’ ahead of Ms. Yellen’s Jackson Hole speech,” HSBC says. Analysts at Brown Brothers Harriman say investors will look for any signs about winding down quantitative easing, the timing of the first rate hike and which instruments will be used to neutralize the excess reserves.
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