AMSTERDAM/LONDON: Gold edged off a one-month peak on Thursday, weighed down by a slight uptick in the dollar, offsetting support from US Federal Reserve Chair Jerome Powell’s dovish comments and some concerns over a stalling global economy.
Spot gold fell 0.1% to $1,825.61 per ounce by 12:43 pm EDT. US gold futures rose 0.1% to $1,827.40.
The dollar index was up 0.3%, dimming gold’s appeal to other currency holders.
Gold prices had hit a one-month peak earlier in the session after Powell said in congressional testimony the US job market was “still a ways off” from the progress that the central bank wants to see before reducing its support for the economy.
Bob Haberkorn, senior market strategist at RJO Futures, said that gold’s move above $1,800 this week along with concerns over a sell-off in equity markets had driven some safe-haven buying of bullion.
“Globally there are some spots that are pretty hot with that Delta variant and China slowing down a bit has sparked concerns about global equity markets, so you’re getting some flight to safety into gold and silver.”
Data on Thursday showed China’s economy grew more slowly than expected in the second quarter, while US weekly jobless claims dropped to a 16-month low last week.
Non-yielding gold tends to gain in a low interest-rate environment, while some investors also view gold as a hedge against higher inflation.
“We’re still seeing a lot of inflation and it does not seem to be as transitory as everyone thinks,” said Michael Matousek, head trader at US Global Investors.
Matousek said, given the inflation and lower real interest rates, gold could attract more bids and move towards $1,900 in the coming months.
Elsewhere, silver rose 0.1% to $26.26 per ounce, while platinum climbed 0.8% to $1,137.99, having earlier hit a one-month high. Palladium slipped 3.9% to $2,717.31 per ounce.