The price of Gold reacted inconclusively yesterday to Friday's summit meeting between the US and Russian presidents in Alaska. The results of the talks that were made public remained too vague to indicate any progress in efforts to end the war in Ukraine. However, there were also no signs of an escalation, which Trump had threatened in the event of the talks failing, Commerzbank's commodity analyst Carsten Fritsch notes.

Powell has to sound very dovish for Gold to benefit

"Following yesterday's talks between Trump, Ukrainian President Zelensky, and European heads of state and government, the chances of a solution to end the war have increased. A meeting between Putin and Zelensky could take place soon. In this respect, the geopolitical risk premium is likely to decline, which should have a dampening effect on the Gold price."

"The focus of market participants is already shifting to the next important event, namely the annual Fed symposium in Jackson Hole in the US state of Wyoming, which begins on Friday. Market participants are hoping that Fed Chair Powell will provide some indication in his opening speech on Friday as to whether a rate cut is on the cards at the next meeting in September, given the recent weaker economic data and increasing political pressure from US President Trump and Treasury Secretary Bessent."

"A 25 basis point rate cut is almost fully priced into Fed fund futures, along with another 25 basis point cut by the end of the year, followed by three more steps of the same magnitude next year. Powell would therefore have to sound very dovish for Gold to benefit."