MTS Help Center

Gold traded near a one-month low after a five-day skid as investors ticked off the hours until an address by Federal Reserve Chair Janet Yellen that may give clues about the likelihood of tighter U.S. monetary policy over the remainder of 2016.

Gold’s blistering rally in the first half of the year, when prices surged 25 percent, hasn’t been extended since July, as speculation mounts that the Fed will raise interest rates, blunting bullion’s appeal. In the lead up to Yellen’s remarks on Friday at a central bankers’ gathering in Jackson Hole, Wyoming, several policy makers, including Vice Chairman Stanley Fischer, have made the case for a hike this year. Traders see one-in-three odds of higher rates next month, while there’s a 57 percent chance of a move in December, up from 51 percent at the start of this week, according to Fed funds futures.

“Gold has eased this week, with short-term risk to the downside,” Jordan Eliseo, Sydney-based chief economist at trader Australian Bullion Co., said in an e-mail. “Fischer has suggested another rate hike could be in order this year, though market expectations may well change dependent on any clues that come out of Jackson Hole.”

China, the world’s biggest gold consumer, cut bullion imports from Hong Kong in July as the highest global prices in more than two years deterred buyers.

Net purchases were 62.1 metric tons from 68.7 tons in June and 40.7 tons in the same month last year, according to data from the Hong Kong Census and Statistics Department compiled by Bloomberg. The mainland bought 101.8 tons compared with 83.4 tons in June, while exports were 39.6 tons from 14.7 tons. Mainland China doesn’t publish the data.

"There is a chance that Yellen could decide that a stronger signal about near-term policy would now be appropriate in light of diminished risks globally and an improved U.S. labor market," HSBC analyst James Steel said.

Reference: Bloomberg