Friday, September 30

Gold eases as investors brace for Powell’s Jackson Hole speech


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Gold was subdued on Friday, as investors

adopted a cautious stance ahead of US Federal Reserve Chair

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Jerome Powell’s speech at a key central bankers’ conference,

which will be watched for guidance on future interest rate

hikes.

Spot gold inched 0.2% lower to $1,755.00 per ounce by

0311 GMT. US gold futures dropped 0.2% to $1,768.10.

However, greenback-priced bullion is set for a weekly rise

of about 0.4%, helped by intermittent dips in an otherwise

resilient dollar.

The dollar index hovered near one-month highs, while

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benchmark US 10-year Treasury yields firmed.

Gold has retreated because the dollar has started picking up

some steam and there’s also some thought that the Fed will

remain in inflation fighting mode, which will be perceived as

hawkish, said Stephen Innes, managing partner at SPI Asset

Management.

Powell’s speech is due at 1400 GMT on Friday at the Jackson

Hole symposium in Wyoming in the United States.

His address will be watched closely by market participants

for any clues on how aggressively the US central bank will

continue tightening monetary policy, and for indications on a

potential change of strategy in case of an economic slowdown.

While gold is considered a safe investment during times of

economic volatility, interest rate hikes increase the

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opportunity cost of holding non-yielding bullion.

“I think Powell’s going to hint that bringing down inflation

will probably require a trade off, in other words we’ll have to

take an economic hit … This is going to be good for gold,”

Innes added.

Fed officials on Thursday maintained that they will drive

rates up and keep them there until inflation has been squeezed.

Spot silver slipped 0.3% to $19.22 per ounce, and

palladium was steady at $2,146.84. Both are set for a

weekly rise.

Platinum rose 0.3% to $883.63, but is down for a

second consecutive week.

(Reporting by Eileen Soreng and Bharat Govind Gautam in

Bengaluru; Editing by Sherry Jacob-Phillips)

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