Gold fell 1% on Friday after Federal
Reserve Chair Jerome Powell in his speech at Jackson Hole said
the US economy will need tight monetary policy “for some time”
before inflation is under control.
Powell said this could mean slower growth, a weaker job
market and “some pain” for households and businesses, but did
not hint at what the Fed might do at its upcoming September
Spot gold fell 1% to $1,740.79 per ounce by 11:05
am ET (1505 GMT), en route to a second straight weekly
decline, down about 0.4% so far. US gold futures
dropped 1.1% to $1,752.60.
“Powell’s statements were quite hawkish and since there was
no dovish pivot, gold will continue to face pressure as it will
have to deal with higher interest rates,” said Philip Streible,
chief market strategist at Blue Line Futures in Chicago.
Gold is considered a hedge against inflation and economic
uncertainties. But rising interest rates make the non-yielding
asset less appealing.
“Gold needs to capture $1,800 in order to gain its momentum,
otherwise $1,740s is key level support,” Streible added.
US two-year Treasury yields briefly popped to their
highest since October 2007 before stabilizing near two-month
Bullion’s dip came despite a weaker dollar.
Earlier in the day, investors took stock of data showing
US consumer spending barely rose in July, but inflation eased
In physical markets, gold premiums in China jumped this week
to their highest since last October, while demand cooled in
Spot silver fell 1.3% to $19.03 per ounce.
“Silver prices are particularly vulnerable given the
observed deterioration in commodity demand, given the metal deterioration
holds little exposure to the rise in supply risk premia that has
been supporting industrial metals,” TD Securities said in a
Platinum fell 1.2% to $870.44, and palladium
fell 0.3% to $2,140.48.
(Reporting by Ashitha Shivaprasad in Bengaluru; editing by
Jonathan Oatis and Shailesh Kuber)