Gold extended losses into a third day on Thursday as the dollar and U.S. Treasury yields gained, and many investors held back, awaiting the next day’s speech from the Fed Chair at Jackson Hole for clues on a strategy for tapering economic support.
Spot gold fell 0.3% to $1,784.86 per ounce by 5:13 a.m. ET after failing to capitalize on its break above the key psychological $1,800 level this week.
U.S. gold futures edged 0.3% lower to $1,786.00.
Fed Chair Jerome Powell is scheduled to speak at the annual economic symposium at Wyoming on Friday, and investors will look for any hints about whether and when the Federal Reserve plans to taper its economic support measures, with the Delta coronavirus variant still a concern.
Dimming appetite for bullion, benchmark 10-year Treasury yields hovered near a two-week high, translating into higher opportunity cost of holding non-yielding gold, while the dollar index also strengthened.
“A significant move in gold is not expected heading into Powell’s speech, and if yields continue to edge higher, gold has the potential to fall further towards $1,760,” said Michael Hewson, chief market analyst at CMC Markets UK.
But gold should “still find decent support on any dips,” Hewson said, adding, “while attention is turning towards Jackson Hole, it’s hard to see how he can be any clearer about a taper timeline until we know what next week’s payrolls report looks like.”
Weekly U.S. jobless claims and second quarter GDP estimates are due at 8:30 a.m. ET on Thursday.
“For gold, any signs that they (Fed) could be more patient amid the ongoing pandemic should see prices well supported,” ANZ Research said in a note.
Gold is considered a hedge against inflation and currency debasement that tends to result from widespread money printing by central banks. An interest rate hike by the Fed would dull bullion’s appeal compared with interest-earning assets.
Elsewhere, silver and platinum fell 0.9% to $23.65 and $987.63 per ounce, respectively.
Palladium slipped 1.1% to $2,402.29.