Gold: Next week's key macroeconomic events to keep an eye on

The troy ounce of the precious metal closed the week with small losses at $1,940. The broad-based USD strength on the back of the minutes of the FOMC's July meeting made it difficult for the XAU/USD to gather bullish momentum in the second half of the week. On the other hand, the cautious market mood amid heightened US-China political tensions helped gold stay relatively resilient.

Coming up next week

There won't be any significant macroeconomic data releases that could impact the risk sentiment on Monday. On Tuesday, second-quarter GDP data from Germany, which is expected to show a 10.1% contraction in the economic activity on a yearly basis, will be watched closely by the market participants. If the GDP reading comes in worse than expected, the shared currency could come under pressure and cause the demand to shift towards the USD.

On Wednesday, Durable Goods Orders will be featured in the US economic docket but investors are likely to ignore this report while waiting for the Kansas City Fed's annual central banking conference, Jackson Hole Symposium. On Thursday, Jerome Powell, Chair of the Board of Governors of the Federal Reserve System, will be discussing the Fed's monetary policy framework in his opening remarks.

Previewing this event, "We expect Powell to shed more light about the upcoming changes to the Statement on Longer-Run Goals and Monetary Policy Strategy," said TD Securities analysts. Last Wednesday, FOMC Minutes showed that most policymakers judged yield caps and targets would likely provide only modest benefits in the current environment. Additionally, policymakers saw costs to yield caps, targets, including the rapid expansion of the balance sheet. If Powell reiterates the view that the Fed is unlikely to opt out for yield curve control, we could see the greenback gather strength and XAU/USD edged lower.

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