Gold Edges Higher as Traders Weigh Fed Warsh's Comments — Market Talk

0752 GMT - Gold prices tick higher as investors assess comments from Federal Reserve Chairman Kevin Warsh on inflation after the U.S. central bank left interest rates unchanged on Wednesday. "Warsh reiterated a commitment to get inflation under control but offered little color on the details of the FOMC discussion," analysts at Deutsche Bank say. "This might make the Fed minutes release on August 19 more of a market-moving event." Markets continue to price in a rate hike by year-end as higher energy costs stemming from the Iran war increase inflationary pressures. In early trading, New York gold futures are up 0.1% at $4,039 a troy ounce. ([email protected])0731 GMT - Saudi Arabia's economic growth is expected to slow to 1.7% in 2026 from 4.6% in 2025, while non-oil growth is forecast to ease to 2.6% from 4.2%, the International Monetary Fund says. The Middle East war and the near-halt in shipping through the Strait of Hormuz have disrupted trade and curtailed oil exports, the fund says. Higher oil prices, however, are expected to more than offset lower export volumes, generating an oil-revenue windfall, while recovery is expected as maritime traffic through the strait gradually normalizes. ([email protected])0722 GMT - Yields on U.K. government bonds, or gilts, climb as investors await the Bank of England interest-rate decision due at 1100 GMT, where it is widely expected to keep rates unchanged at 3.75%. This follows the U.S. Federal Reserve Wednesday's decision to keep rates on hold. Investors are also concerned about high oil prices and an increased inflation risk. Ten-year gilt yields climb 1.4 basis points to last trade at 5.033%, Tradeweb data show. ([email protected])0719 GMT - Bitcoin edges higher as investors digest the Federal Reserve's latest policy decision and earnings from U.S. tech giants Microsoft and Meta. The Fed left rates unchanged while Fed Chair Kevin Warsh provided little clues about future policy. Markets had priced in a slight chance of the Fed raising rates, causing the dollar to fall briefly in reaction to the decision. Microsoft shares rose after it delivered stronger-than-expected revenue growth forecasts. Meta shares, however, fell after its revenue guidance underwhelmed. Apple and Amazon are due to report after the U.S. market closes Thursday. Bitcoin rises 0.7% to $63,920, LSEG data show.([email protected])0715 GMT - Sterling falls ahead of the Bank of England's policy decision at 1100 GMT. The BOE is expected to keep rates unchanged, with the focus on any clues about whether it will raise rates in future. The BOE probably won't suggest a rate rise is possible in September, keeping its statements vague, Commerzbank's Michael Pfister says in a note. Inflation is recently somewhat subdued, the economic upturn is fragile and Iran war uncertainty has increased. The BOE will probably want to wait as long as possible before raising rates, he says. "Ideally, they would probably prefer to avoid raising rates altogether and switch back to rate cuts soon." Sterling falls 0.2% to $1.3338. The euro rises 0.1% to 0.8579 pounds.([email protected])0705 GMT - Eurozone government bond yields rise, tracking U.S. Treasury yields, with the 30-year German Bund yield hitting a two-month high. This follows fresh military escalation in the Middle East and the Federal Reserve's decision to hold rates while Chair Kevin Warsh was cautious about signalling future rate increases. "Looking at the market's reaction [to the Fed's press conference], the conclusion was that the Fed was not going to be as tough on fighting inflation as initially thought," ING's Chris Turner says in a note. Eurozone first-estimate GDP data and German inflation data are in focus. The 30-year German Bund yield rises as high as 3.687%, LSEG data show. The 10-year Bund yield rises 3.2 basis points to 3.188%. ([email protected])0641 GMT - The dollar recovers after reaching a one-week low Wednesday following the Federal Reserve's decision to keep interest rates unchanged. The decision was largely expected but some market participants were pricing a risk of a rate rise. Three policymakers voted to raise rates but they are known for favoring tighter policy, Commerzbank's Michael Pfister says in a note. The dollar was also hit by Fed Chair Kevin Warsh sidestepping questions about how he intends to achieve the 2% target, he says. However, the market still expects a rate rise by year-end as U.S.-Iran strikes lift oil prices while the dollar benefits from its safe-haven role. The DXY dollar rises 0.1% to 101.004 after reaching a low of 100.762 Wednesday. ([email protected])0631 GMT - The rebound in second-quarter French economic growth is encouraging, though some details are concerning, particularly for investment, Pantheon Macroeconomics' Claus Vistesen says in a note. Overall GDP rose by 0.2% in the second quarter, after a 0.1% contraction in the first. Consumer spending rose by 0.2%, partially reversing a 0.3% decline in the first quarter, supported by an uptick in services consumption and a jump in auto purchases, he says. However, total investment fell 0.3%, following a 0.8% decline in January to March, on weak public investment. Services investment, a key recent driver of overall capex growth, stalled in the second quarter. Nevertheless, consumer spending has scope to strengthen as the drag from weak energy consumption and high oil prices fades, Vistesen says. ([email protected])0609 GMT - Federal Chair Kevin Warsh's approach of eschewing any form of forward guidance makes it extremely difficult for the markets to form a coherent analysis of Fed policy, MainSky Asset Management's Eckhard Schulte says in a note. "Markets will have to get used to this style of communication; the resulting high level of uncertainty acts as a drag on equities and long-term bonds, as well as the U.S. dollar," the chairman of the asset manager's board says. Warsh left no doubt that the Fed is serious about its 2% inflation target and intends to deliver on it. But he didn't provide a coherent explanation as to why the Fed did not follow the three dissenting members who had advocated for a hike, Schulte says. ([email protected])0600 GMT - In the Asia-Pacific region, losses stemming from natural disasters remained significantly lower than in previous years, Munich Re data for the first half of the year shows. Total losses amounted to $8.7 billion of which slightly more than $1 billion was insured, data from the German reinsurer shows. For the second half of the year, El Nino poses significant risks to large parts of the region, the data shows. For example, Australia and parts of Southeast Asia face increased risk of heat, drought and wildfires, Munich Re says. El Nino is a climate phenomenon and influences extreme weather events in many regions of the world. ([email protected])0600 GMT - Severe winter storms have caused extensive damage in Europe, Munich Re data for the first half of the year shows. In January, storm Kristin swept across the Iberian Peninsula with wind speeds of up to 170 km/h and heavy rainfall, causing damage totaling around $7.7 billion, of which $1.8 billion was insured, data from the German reinsurer shows. From all the natural disasters in Europe during the first half of the year, the nine winter storms alone accounted for about 80% of total losses and 70% of insured losses, the data shows. ([email protected])0554 GMT - U.S. rates markets are expected to remain exposed to rising pressure in the near term as the market continues to challenge the Federal Reserve's inflation-fighting credibility, TD Securities' analysts say in a note. "Hawkish comments by FOMC members once the communication blackout ends should help restore some of the Fed's inflation fighting credibility, but we see significant risk of 10-year Treasurys breaking through key technical levels in the coming days," they say. Markets were giving Fed Chairman Kevin Warsh credibility on bringing down inflation following his first press conference in June, but the honeymoon period has ended with a bang as long-end rates have moved sharply higher amid a rebound in inflation expectations, they say. ([email protected])