(Kitco News) –Gold and silver continue to trade in tight ranges as traders await the next catalyst for price action – and Fed Chair Powell’s keynote speech from Jackson Hole on Friday is the next potential trigger, according to Ole Hansen, head of commodity strategy at Saxo Bank.
“In recent weeks, some key U.S. economic data have surprised to the downside, while a stronger-than-expected PPI print reminded markets that inflationary pressures may still emerge from Trump's tariff policies,” Hansen wrote on Tuesday. “While that print temporarily cooled expectations for a larger or faster series of rate cuts, the market is still pricing a high probability of a 25 bp cut at the September FOMC meeting, but the path beyond remains uncertain.”
“Powell’s Jackson Hole remarks will therefore be scrutinized for any shift in tone, especially on the Fed’s tolerance for inflation if growth continues to soften.”
Hansen noted that speculation is also swirling around who might replace Powell in May, even as Treasury Secretary Scott Bessent ups the ante with calls for 150 basis points in rate cuts.
“For gold, this uncertainty combined with a summer holiday market, has translated into a stand-off, resulting in a range bound market which for the last three months has seen the price pivoting around USD 3,350, underpinned by steady investment demand,” he said. “Silver, too, has lacked momentum, with industrial demand and structural deficits, together with strong underlying technicals offering support, but with speculative longs showing reduced appetite to press the upside in the absence of a fresh driver.”
Hansen said investors looking for a potential trigger have now shifted their focus to U.S. monetary policy and the dollar. “Several developments could provide the spark needed to break the current stalemate,” he said.
The first – and most imminent – would be “a clearer Fed pivot tone at Jackson Hole or beyond, confirming a September cut and hinting at a more accommodative stance into year-end,” Hansen said. “That would likely weigh on the dollar and push real yields lower, providing a tailwind for both metals.”
“Weaker labor data, whether from payrolls or JOLTS, would reinforce easing expectations and support gold as the dollar softens,” he continued. “Especially if the Fed cut rates despite resurging inflation.”
The third possible trigger is an uptick in geopolitical risk, “with both Ukraine and the Middle East capable of reintroducing a safe-haven premium at short notice,” he said.
And finally, for silver in particular, “stronger-than-expected Chinese policy support or upside surprises in solar installations could highlight the structural deficit and tighten balances further.”
Hansen said that while both gold and silver remain rangebound as they await a catalyst, “both markets retain a supportive foundation of flows and structural demand, with central banks and industrial users continuing to absorb supply.”
“The next move higher will likely require a macro trigger—most obviously a dovish Fed signal, weaker U.S. data, or a geopolitical shock,” he concluded. “Until then, the metals look set to remain range-bound, with traders left waiting for volatility to return.”
