Gold futures headed for back-to-back declines Thursday morning, amid higher U.S. Treasury yields and a rising dollar, and as some Federal Reserve officials said they favored a near-term unwind of COVID-era monetary policies.
Investors are awaiting the annual Jackson Hole central-bankers symposium on Friday where Fed Chairman Jerome Powell may indicate that the central bank will slow monthly purchases of Treasurys and mortgage-backed securities, which could influence bullion prices.
Ahead of that, commodity investors parsed data that showed that weekly U.S. jobless claims for the week ended Aug. 21 rose by 4,000 to 353,000, compared with average expectations for 350,000 forecast by a Dow Jones-polled economists.
Meanwhile, a second reading of U.S. second-quarter GDP rose to a 6.6% growth rate from an initial reading of 6.5%.
December gold was trading $7.30, or 0.9%, lower at $1,783.70 an ounce, following a 1% decline on Wednesday, posting the biggest one-day percentage decline since Aug. 9 for a most-active contract, FactSet data show.
Markets early Thursday were digesting comments from Kansas City Fed President Esther George, who said the U.S. economy has hit the necessary benchmark of “substantial” progress needed to start to slow down its $120 billion a month asset purchases.
“I would be ready to talk about tapering sooner rather than later,” she told in a CNBC interview ahead of Powell’s Jackson Hole speech.
St. Louis Federal Reserve President James Bullard, following George, also told the business network that it “does seem like we are coalescing on a plan,” referring to an eventual wind-down of Fed’s asset purchases.
Lower-bound trading for bullion came as benchmark 10-year Treasury note yields rose to 1.36%, adding to a climb to a two-week high, and competing against gold and silver, which don’t offer a coupon, for safe-haven demand.
Meanwhile, the U.S. dollar, as gauged by the ICE U.S. Dollar Index was edging 0.1% higher, creating some headwinds for dollar-pegged assets.
Silver for September delivery to trade 21 cents, or 0.9%, lower at $23.57 an ounce, after declining 0.5% on Wednesday.
Source: Marketwatch