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Gold headed for a fifth straight monthly drop, the longest losing run in four years, as more robust monetary tightening by the Federal Reserve looks likely.
Bullion is trading near a one-month low as Fed officials stressed their commitment to defeating inflation, while remaining vague on how big their policy move will be at the rate decision meeting in September.
New York Fed chief John Williams said on Tuesday that interest rates probably need to advance above 3,5 percent at some point to contain price pressures. Separately, Richmond Fed President Thomas Barkin struck a similarly resolute tone.
Meanwhile, Atlanta counterpart Raphael Bostic called the duty to curb inflation “unshakable,” but also said he’d be open to dialling back the pace of increases if prices cooled. That followed Chair Jerome Powell’s speech last week, where he stressed that bringing price pressures down toward the Fed’s 2 percent target was the “overarching focus,” despite the tightening likely to cause pain for US households and businesses.
Still, there are fresh signs of robustness in the US economy. Jobs openings and a consumer confidence gauge both topped forecasts, pointing to strength in household and labour demand that risks sustaining inflationary pressures and raises the prospects for a third straight 75 basis-point interest-rate hike.
Spot gold was little changed at US$1 723,10 an ounce as of 7:18 am in London, and was down 2,5 percent for August.
Prices fell to US$1 720,45 on Monday, the lowest level since July 27. The Bloomberg Dollar Spot Index dropped 0,2 percent after rising 0,1 percent in the previous session. Silver, palladium and platinum advanced. — Bloomberg.
Online Reporter