· Gold prices have drifted lower, pressured by a firmer US dollar as investors await cues on further interest rate rises from central bankers meeting in Jackson Hole this week.
· Losses were limited, however, after a threat by US president Donald Trump to shut down the government unless he got funding for a border wall with Mexico.
· Geopolitical risk tends to drive buying of safe-haven investments like bullion. Key to the direction of the market were funds holding huge long positions in Comex gold futures, said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
· "We've had two failed attempts at the upside this year which resulted in a flush out of longs, and the longer we stay here without breaking higher, the bigger the risk that these guys will start to get impatient," he said.
Gold failed in April and June to break through the top of its broad $US1,200-$US1,300 range this year.
"But at the same time, there's this threat to close down the US government by Trump if he doesn't get his wall.So, that's providing some underlying support."
· Spot gold was down 0.25 per cent at $US1,286.5 per ounce by 2.45 pm Thursday ET (0445 Friday AEST), giving back some of the previous session's gains.
· The most-active US gold futures for December delivery settled down $US2.70 at $US1,292 an ounce.
· Traders were focused on an annual meeting of central bankers in Jackson Hole, Wyoming, starting on Thursday, where Federal Reserve Chair Janet Yellen and European Central Bank chief Mario Draghi are set to deliver speeches on Friday on the outlook for monetary policy and interest rates.
· "Gold traders were ambivalent today keeping the metal in a tight range with market hoping that the dashing duo of Draghi and Yellen can dazzle tomorrow at Jackson Hole and provide fresh inspiration," said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.
· Silver was down 0.56 per cent at $US16.92 an ounce.
Reference: Business News
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