Gold tepid on dollar strength; focus on Jackson Hole symposium

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Gold prices were subdued on Wednesday, as

the U.S. dollar strengthened after hawkish comments from a

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Federal Reserve official kept investors cautious ahead of

Jackson Hole symposium due later this week.

Spot gold was down 0.2% at $1,744.10 per ounce, as of

0317 GMT, after rising 0.7% in the previous session.

U.S. gold futures eased 0.2% to $1,757.70.

The dollar rose 0.2% against its rivals, making gold

more expensive for buyers holding other currencies.

Fed Chair Jerome Powell’s speech at the annual global

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central banking conference in Jackson Hole, Wyoming on Friday

will be keenly watched for more cues on future interest rate

hikes.

“We’re seeing the market digest the correction after six

days of losses with speech from Powell on Friday being an

important thing to markets at this point, expecting some kind of

a guidance, or framework about the Fed policy,” said Ilya

Spivak, a currency strategist at DailyFX.

“Overall, macro environment is materially not very much

different. At this stage, the bias remains very much bearish for

gold.”

Minneapolis Federal Reserve Bank President Neel Kashkari was

the latest official to reiterate the U.S. Fed’s focus on

controlling inflation ahead of all else.

The U.S. central bank has raised its benchmark overnight

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interest rate by 225 basis points in total since March to

contain inflationary pressures and has noted that further

tightening would depend on economic data points.

Sales of new U.S. single-family homes plunged to a

6-1/2-year low in July, while a survey from S&P Global showed

its measure of private sector business activity fell to a

27-month low, suggesting Fed efforts to tame inflation were

working.

Higher interest rates increase the opportunity cost of

holding non-yielding bullion.

Indicative of sentiment, holdings of SPDR Gold Trust ,

the world’s largest gold-backed exchange-traded fund, fell 0.3%

to 984.38 tonnes on Tuesday.

Spot silver fell 0.6% to $19.04 per ounce, platinum

dipped 0.3% to $876.56, while palladium gained

0.2% to $1,984.67.

(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu

Sahu and Sherry Jacob-Phillips)