Powell’s speech, Nvidia’s chips, Meta deal - what’s moving markets
Investing.com-- Gold prices fell in Asian trade on Friday, remaining under pressure from a stronger dollar as investors scaled back bets on more U.S. interest rate cuts before a hotly anticipated address from Federal Reserve Chair Jerome Powell.
Broader metal prices also retreated, as the dollar firmed in anticipation of Powell. The greenback was also set for strong weekly gains.
Spot gold fell 0.3% to $3,328.37 an ounce, while gold futures fell 0.3% to $3,371.15/oz by 00:54 ET (04:54 GMT).
But losses in gold were limited by some safe haven demand remaining in play, amid increasing signs that a Russia-Ukraine peace treaty will not be reached anytime soon, despite U.S. efforts at negotiation.
Gold heads for second week of losses as rate cut bets wane
Gold prices were trading down between 0.2% and 0.5% this week, and were headed for a second consecutive week of losses.
This came chiefly as traders dialed down expectations that the Fed will cut interest rates in September. The minutes of the central bank’s late-July meeting, which were released on Wednesday, also showed a bulk of policymakers supporting a hold in the near-term.
Fed fund futures showed markets pricing in a 73.1% chance the Fed will cut rates by 25 basis points in September, down sharply from a 92.2% probability seen last week, according to CME Fedwatch.
High-for-longer rates present long-term pressure on gold and other non-yielding assets, given that they increase the opportunity cost of investing in said assets over debt, specifically Treasuries.
Metal prices weak as dollar firms ahead of Powell speech
Focus is now squarely on an address by the Fed’s Powell at the Jackson Hole Symposium later on Friday, for more cues on the path of interest rates.
Investors will be waiting to see whether Powell will address recent data showing mildly lower inflation and a cooling labor market.
The Fed Chair has cited uncertainty over the inflationary impact of President Donald Trump’s trade tariffs as the biggest point of uncertainty for the Fed in lowering rates.
This notion saw traders scale back bets on a September cut, which in turn boosted the dollar and dented metal prices. The greenback was set to gain about 0.9% this week.
Spot platinum fell 0.7% to $1,347.85/oz, while spot silver fell 0.2% to $38.0735/oz. The two were set for mild weekly gains.
Among industrial metals, benchmark copper futures on the London Metal Exchange fell 0.2% to $9,724.10 a ton, while COMEX copper futures fell 0.3% to $0.2% to $4.4420 a pound.