Gold prices edged lower on Friday as the US dollar reclaimed a 2-1/2 month peak, but the metal was headed for its best week in six ahead of a speech by Federal Reserve Chair Jerome Powell that could offer clues on the interest rate outlook.
Spot gold eased 0.2% to $1,913.90 per ounce by 0323 GMT, while US gold futures shed 0.3% to $1,942.
Gold has risen about 1.3% so far in the week, which could be its first week of gains this month, as prices climbed to their highest since Aug. 10 on Thursday after a retreat in US Treasury yields.
Two Fed officials on Thursday tentatively welcomed a recent jump in bond market yields, while noting they see a good chance that no more interest rate increases will be needed.
For more rate clues, investors will focus on Powell and European Central Bank President Christine Lagarde’s speeches expected later in the day at the annual economic symposium in Jackson Hole, Wyoming.
“The false break of $1,900 has provided a nice rally to the $1,920 area, but Powell has the ability to send gold back down to $1,900 as much as he could send it to $1,940,” said Matt Simpson, a senior analyst at City Index.
“The stronger US dollar is clearly acting as a headwind for gold.” The US dollar raced for its sixth straight weekly gain, making bullion more expensive for overseas buyers.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell further on Thursday and were at their lowest since January 2020.
Among other metals, spot silver edged 0.4% lower to $24.04 per ounce and platinum was steady at $933.68.
Palladium fell 0.3% to $1,236.69. Silver and platinum were headed for their best weeks since July 14.
Palladium was set for a second straight weekly decline.
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