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Gold eases as dollar recovers lost ground, investors gauge Powell testimony

By Brijesh Patel

Topics
Gold Prices | Dollar | Jerome Powell

Reuters 

Photo: Reuters
Photo: Reuters

By Brijesh Patel

(Reuters) - Gold edged lower in choppy trade on Tuesday as the recovered ground lost in the immediate wake of comments from U.S. Federal Reserve Chairman Jerome Powell, who said the economic recovery was "uneven and far from complete."

Spot gold was down 0.3% at $1,803.62 an ounce by 2:10 p.m. EST (1910 GMT), after briefly moving into positive territory as the dipped following Powell's comments.

U.S. gold futures settled down 0.1% at $1,805.90.

Powell said it will be "some time" before the Fed considers changing policies it adopted to help the economy get back to full employment and he "does not expect inflation to rise to troubling levels."

"There's been a little volatility around Powell's Senate appearance but he hasn't really said anything to rock the boat," OANDA analyst Craig Erlam said.

"Despite the volatility, we haven't seen any significant directional movement in yields or the dollar, which is why gold is only marginally lower, a reflection of the being a little higher."

The dollar index crawled back up 0.2%, moving away from near a six-week low, making gold more expensive for holders of other currencies.

But gold might not reverse course to gain substantially "until we get a real spike in inflation expectations or a Fed that talks about controlling the yield curve," said IG Market analyst Kyle Rodda.

Rising yields have challenged bullion's appeal as an inflation hedge, since they increase the opportunity cost of holding gold.

Gold jumped 1.5% on Monday as prospects of rising inflation triggered equity valuation concerns and drove investors toward the safe-haven metal.

Silver dropped 2.4% to $27.49 an ounce, having earlier hit a three-week peak at $28.31.

Platinum slipped 3.3% to $1,230.54, after touching a more than one-week low earlier in the session. Palladium lost 2% to $2,349.26.

 

(Reporting by Brijesh Patel in Bengaluru; Editing by Jan Harvey and Matthew Lewis)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Wed, February 24 2021. 01:18 IST
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