Gold prices declined on Friday as the U.S. dollar rose with Treasury yields after Federal Reserve Chair Jerome Powell left the door open to more interest-rate hikes later this year during his annual speech at the Kansas City Fed’s economic symposium in Jackson Hole, Wyoming.
But the pullback didn’t stop gold prices from logging their first weekly gain after four straight weeks of losses.
Price action
-
Gold futures for December delivery
GC00,
-0.20% GCZ23,
-0.20%
fell by $7.20, or 0.4%, to settle at $1,939.90 per ounce on Comex, marking a back-to-back loss after a brief string of gains, Dow Jones Market Data show. -
Silver futures for September delivery
SI00,
+0.23% SIU23,
+0.23%
gained 35 cents, or 1.5%, to settle at $24.58 per ounce after tacking on 4% Wednesday. -
October platinum
PL00,
+0.92% PLV23,
+0.92%
rose by $5.20, or 0.6%, to settle at $948 per ounce, while palladium for September delivery
PA00,
-1.25% PAU23,
-1.25%
declined by $15.50, or 1.3%, to $1,229 per ounce. -
Copper for September delivery
HGU23,
-0.15%
rose by 1 cent, or 0.3%, to settle at $3.78 per pound.
Market drivers
Powell delivered his keynote address at Jackson Hole on Friday. Instead of bringing the pain for markets as he did last year, he was much more measured, reiterating promises to keep a careful eye on the economic data while leaving the door open to more interest-rate hikes.
See: Fed’s Powell unsure of the need to raise interest rates further
However, the rise in Treasury yields and the dollar helped renew pressure on the yellow metal Friday after a brief reprieve earlier in the week.
OANDA’s Craig Erlam explained why in a note to clients.
“It’s staged a small recovery this week but it’s tentative at best and unless the narrative changes from the Fed, or we see significant improvements in the inflation data (or deterioration in labor market figures and elsewhere) it may struggle to generate much momentum to the upside,” he said in emailed commentary.
“Comments from Powell have not put traders’ minds at ease and the traders are increasingly being forced to come to terms with rates remaining higher for even longer, strengthening the dollar and weighing on gold again today.”
Rising global bond yields and a stronger U.S. dollar have stoked a selloff in gold over the past month. The yield on the 10-year Treasury note
BX:TMUBMUSD10Y
rose 4 basis points to 4.274% on Friday.
The ICE U.S. Dollar Index
DXY,
a gauge of the dollar’s strength against other major currencies, was trading up 0.1% at 104.08.
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