Gold hit four-week lows on Thursday, under pressure from upbeat U.S. data in the run-up to a speech by Federal Reserve Chair Janet Yellen this week that will be watched for clues on monetary policy.
Gold prices ended the U.S. day session lower again and hit another four-week low Thursday. Technical selling was featured, including more sell stops being triggered when near-term support levels were breached. There was also some nervous long liquidation, ahead of an important Fed meeting that began today. December Comex gold was last down $4.50 an ounce at $1,325.30. December Comex silver was last down $0.043 at $18.64 an ounce.
The world marketplace is focused on the Federal Reserve’s annual symposium that started Thursday in Jackson Hole, Wyoming. Fed Chair Janet Yellen speaks at the event on Friday morning. While it’s hoped she will shed new light on the timing of any future interest rate increase from the U.S. central bank, many think her speech will not yield much fresh insight. However, past Jackson Hole Fed confabs have produced markets-moving results and many traders are edgy ahead of her comments.
TD Securities looks for gold to snap back since analysts don’t expect Federal Reserve Chair Janet Yellen to be as hawkish in a Friday speech as many traders seem to anticipate, says TD Securities. Comex December gold Thursday fell as far as $1,321an ounce and was down $4.30 to $1,325.40 as of 12:27 p.m. EDT. “Speculative investors seemed to have abandoned their long gold positions on the concern that…Yellen may signal a firm commitment to hike rates this year in her Jackson Hole policy symposium address this Friday,” TDS says. “Some gold observers are even arguing that the FOMC may increase rates as early as September. However given the gold market's prepositioning for a more hawkish tone (a somewhat firm commitment to a hike in the second half of 2016) than is likely to be sounded by the Fed chair, the yellow metal may post a smart rebound from these lows.” TDS says Fed policymakers may sound a more hawkish tone than they have been, but nevertheless doubts there will be “an outright pledge to hike before year-end.”
Reference: Kitco, Reuters
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