Gold prices drifted lower on Thursday, August 24, pressured by a firmer dollar as investors
awaited cues on further interest rate hikes from central bankers meeting in Jackson Hole this week.
Spot gold was down 0.25 percent at $1,286.5 per ounce by 2:45 p.m. ET (1845 GMT), giving back some of the previous session’s gains.
The most-active U.S. gold futures for December delivery settled down $2.70 at $1,292 an ounce.
Losses were limited, however, after a threat by U.S. President Donald Trump to shut down the government unless he got funding for a border wall with Mexico. Geopolitical risk tends
to drive buying of safe-haven investments like bullion.
Key to the direction of the market were funds holding huge long positions in Comex gold futures, said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Gold failed in April and June to break through the top of its broad $1,200-$1,300 range this year.
“But at the same time, there’s this threat to close down the U.S. government by Trump if he doesn’t get his wall so that’s providing some underlying support.”
Bullion is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
The U.S. dollar recovered on Thursday, as investors await what message Fed policymakers will send from Jackson Hole and holding gains after U.S. jobless claims were better than
expected.
Silver was down 0.56 percent at $16.92 an ounce, while platinum fell 0.18 percent to $974.25 an ounce. Palladium eased 0.16 pct to $931.50 per ounce.
