NEW YORK: Gold retreated over 1% on Wednesday, sliding further below the $1,800 level as the dollar ticked higher and investors hoped for a timeline for the tapering of economic support from the US Federal Reserve at this week’s Jackson Hole symposium.
Spot gold slipped 0.8% to $1,788.90 per ounce by 1:46 pm EDT (1746 GMT), while US gold futures settled down 1% at $1,791 an ounce.
Bullion rallied 1.4% on Monday to the highest in nearly three weeks, driven by a broad retreat in the dollar.
Prices have however been on a downward trajectory since as the dollar steadied off a one-week low, limiting appetite for the metal as a stronger dollar increases gold’s price for holders of other currencies.
“There has been a boost in risk appetite and the dollar has also climbed up resulting in some consolidation in the metal,” said Bart Melek, head of commodity strategies at TD Securities, adding some investors were also taking profits.
Fed Chair Jerome Powell is to speak on Friday at the central bank’s annual economic symposium at Jackson Hole, Wyoming, which had to be moved online because of the US COVID-19 surge.
Investors remain divided over whether they will get a roadmap on when the US central bank may start trimming its bond-buying program and if Powell would tone down the Fed’s hawkish tone, in turn helping gold.
“The longer term (gold) holders are on the sidelines right now, until they get a little clarity out of the Jackson Hole,” said Michael Matousek, head trader at US Global Investors.
“But as the Jackson Hole gets underway and finishes out later in the week, you’ll probably see a bid or a continuation of the upward trend that we’ve seen over the past couple of weeks,” Matousek added.