Euro tumbles after unexpected resignation of new French Prime Minister
Investing.com -- Gold prices fell Monday, 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.
At 07:55 ET (11:55 GMT), Spot gold fell 0.3% to $3,328.25 an ounce and gold futures dropped 0.4% to $3,369.62/oz.
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
Gold prices were heading for a second consecutive week of losses 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.
Powell’s speech in focus
Focus is now squarely on an address by Fed chair Powell at the Jackson Hole Symposium later in the session, for more cues on the path of interest rates.
Investors will be waiting to see whether Powell addresses 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 0.2% to $1,331.75/oz, while spot silver fell 0.5% to $37.905/oz.
Among industrial metals, benchmark copper futures on the London Metal Exchange fell 0.1% to $9,737.35 a ton and COMEX copper futures fell 0.1% to $4.4410 a pound.
Ambar Warrick contributed to this article