Gold prices was steady on Friday, August 25, marking time ahead of speeches by U.S. Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi
later in the day, in case they give any new steer on monetary
policy.
Spot gold was flat at $1,287.20 an ounce by 1150 GMT, after slipping nearly 0.3 percent in the previous session. U.S. gold futures were unchanged at $1,292.30 per ounce.
Gold is highly sensitive to rising interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the greenback.
“The market is waiting for the speech by Draghi to hear anything about tapering and the ultra-loose monetary policy from the ECB, and normalisation of interest rates in the United
States from Yellen,” said Peter Fertig, a consultant at Quantitative Commodity Research.
“There could be some speculative buying ahead of the speeches but at this stage it makes sense to have low exposure to gold.”
U.S. jobless claims were better than expected, according to data on Thursday, bolstering views that Yellen could signal a monetary policy tightening due to a recovery in the world’s
largest economy.
Escalating geopolitical concerns were also preventing gold prices from retreating significantly, market participants said.
“Political uncertainty remains high and continues to provide a strong level of support to prices. Trump’s barrage of tweets during negotiations over the debt ceiling continues to fuel a level of uncertainty in the market,” ANZ analyst Daniel Hynes said in a note.
President Donald Trump on Thursday picked a new fight with his fellow Republicans, saying congressional leaders could have avoided a “mess” over raising the U.S. debt ceiling if they had taken his advice.
Gold is used as an alternative investment during times of political and financial uncertainty. “Gold looks very well supported ahead of $1,280, with the $1,283-85 level tested a few times this week and still holding,” MKS PAMP analyst Tim Brown said.
“The week’s high of $1,293 would be the first target on the upside, followed by the psychological $1,300 level.”
Silver edged up 0.6 percent to $17 an ounce, while platinum was flat at $978.60 ounce.
Palladium was up 0.6 percent at $937.30 per ounce, after earlier touching its highest in 16 years at $940.50. The metal has gained 1.2 percent so far in the week.
