Investing.com -- Gold prices fell on Friday as belief in yet more monetary policy easing around the world ebbed on the back of comments from various central bankers.
By 11 AM ET (1700 GMT), gold futures for delivery on the Comex exchange were down 0.3% at $1,494.45 a troy ounce while spot gold was down 0.1% at $1,490.88.
Silver futures were down 0.2% at $17.58 an ounce, while Platinum Futures were down 0.2% at $891.45.
Reserve Bank of Australia Philip Lowe got the ball rolling by saying that the bank’s recent rate cuts are working and that extreme monetary policy measures – such as negative interest rates and quantitative easing – were “extraordinarily unlikely”.
Later, Bank of England deputy governor Dave Ramsden put the prospect of rate hikes back on the table in the case that the U.K. leaves the EU smoothly, with a transitional deal. Ramsden told Bloomberg in an interview that Brexit uncertainty has damaged the supply capacity of the British economy, lowering the rate at which it can grow without generating inflation in future.
And two Federal Reserve officials also chimed in, with Dallas Fed president Robert Kaplan saying that the Fed’s two cuts so far this year don’t represent the start of a “full-fledged rate cutting cycle.”
Kaplan said he expected strong consumer demand to keep sustaining the U.S. economy through a soft patch in business investment caused by trade uncertainty. His sentiments were echoed more starkly at the same event Kansas City Fed chief Esther George, who had already dissented from the last two decisions to cut the Fed Funds rate.
"While weakness in manufacturing and business investment is evident, it is not clear that monetary policy is the appropriate tool to offset the risks faced by businesses in those sectors, when weighted against the costs that could be associated with such action,” George said.
“If you actually trade gold you can feel the lack of emotion in the markets these days as buying interest continues to run tepid,” said Axitrader market strategist Stephen Innes. “The expectation for weaker economic data and the current level of central bank policy response seems to be all factored into the current price, suggesting gold traders need a new catalyst.”
Innes cautioned against taking major positions ahead of a “binary” Brexit event on Saturday, when the U.K. House of Commons votes on Prime Minister Boris Johnson’s EU Withdrawal Agreement. However, breaking reports suggest that opponents of the bill have crafted an amendment that would still force the government to seek a three-month extension to the Brexit deadline – a time that they hope would expose what they see as the bill’s shortcomings. A poll by research firm YouGov suggests U.K. voters support the agreement by a margin of 2:1.