Gold extended gains above $1,900 on Wednesday, drawing support from a retreat in U.S. bond yields as investors positioned for guidance from monetary policymakers at the Jackson Hole symposium, reports Reuters.
Spot gold firmed 0.3 per cent to $1,903.60 an ounce by 1136 GMT, drifting higher for a third straight session. US gold futures rose 0.4 per cent to $1,932.60.
"It's all about Jackson Hole at this point. I think it's just a case of traders want to hear what the Fed has to say and don't want to be caught napping," said Craig Erlam, senior markets analyst at OANDA.
"The trade action from the last couple of days highlights trepidation in the market to overly commit one way or another ahead of the event."
Offering some respite to bullion, which touched a five-month low last week, benchmark 10-year Treasury yields came off almost 16-year peaks hit on Tuesday.
The euro fell after data showed the downturn in euro zone business activity has deepened far more than expected, sending euro-priced gold to a two-week high.
US Federal Reserve officials at Jackson Hole were likely to be "very hesitant to deviate too significantly from the messaging", Erlam said. "We're not going to see any reference whatsoever to rate cuts," he added.
The Fed must be open to the possibility that the economy would begin to re-accelerate rather than slow, with potential implications for the inflation fight, Richmond Fed President Thomas Barkin said on Tuesday.
SPDR Gold Trust, the world's largest gold-backed ETF, said its holdings slid back to their lowest since mid-January 2020. In other metals, spot silver gained 1.7 per cent to $23.79 an ounce and platinum added 0.7 per cent to $925.10. Palladium was up 1.6 per cent at $1,280.59.
