Gold futures finished lower on Thursday after four straight days of gains as traders awaited a speech on Friday from Federal Reserve Chairman Jerome Powell.
A day earlier, a sharp drop in bond yields in Europe and the U.S. in the wake of weak economic data sparked the sharpest rise in prices for the most-active gold contract since the end of July.
Price action
-
Gold futures for December delivery
GC00,
-0.20% GCZ23,
-0.20%
fell by $1, or nearly 0.1%, to settle at $1,947,10 per ounce on Comex, marking the first loss in five sessions. -
Silver futures for September delivery
SI00,
+0.23% SIU23,
+0.23%
declined by 16 cents, or 0.7%, to $24.23 per ounce after tacking on 4% Wednesday. -
October platinum
PL00,
+0.92% PLV23,
+0.92%
added $4.80, or 0.5%, to $943 per ounce, while September palladium
PA00,
-1.25% PAU23,
-1.25%
declined by $36.80, or 2.9%, to $1,244.60 per ounce. -
Copper prices for December delivery
HGU23,
-0.15%
fell by 4 cents, or 1%, to $3.77 per pound.
Market drivers
The Federal Reserve’s annual Jackson Hole economic policy symposium runs through Saturday and the central bank’s Chairman Jerome Powell is scheduled to speak Friday morning.
Read more on Jackson Hole meeting: When is Jerome Powell’s speech? What investors need to know.
The “future path for global interest rates is firmly on the agenda” at the symposium after months of aggressive interest-rate hikes, said Stuart O’Reilly, market insight analyst at The Royal Mint, in emailed commentary.
“Many gold traders…are holding their breath in anticipation of potential signal from the world’s economic leaders,” he said, with Powell “offering a temperature check on the economy and interest rates.”
While gold investors are in a “‘wait and see’ mode, we can expect Powell to reaffirm his commitment to the [economic] data,” said O’Reilly. “If Powell indicates that U.S. interest rates will remain elevated for a prolonged period, despite wage pressures subsiding recently, gold prices could be impacted.”
However, if Powell’s economic outlook for the short-to-medium term looks brighter, the yellow metal could gain on a signal of future rate decreases, he said. “Ultimately, traders will be listening closely for Powell’s tone on future rate hikes, and whether higher rates should be priced-in for the long-term.”
On Wednesday, gold prices benefited from a drop in European and U.S. bond yields to their lowest levels in a week, but prices of the yellow metal were seeing a modest pullback Thursday as yields crept higher once again. A stronger U.S. dollar also weighed on the yellow metal.
“Gold was one of the main beneficiaries of the breakdown in real yields and the ensuing retreat in the dollar,” said Marios Hadjikyriacos, senior investment analyst at XM, in emailed commentary.
The yield on the 10-year Treasury note
BX:TMUBMUSD10Y
rose by 4.1 basis points to 4.224% on Thursday. The ICE U.S. Dollar Index
DXY,
a gauge of the greenback’s strength against other major currencies, rose by 0.5% at 103.93.
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