Gold at four-week low as dollar firms; investors await Yellen speech

NEW YORK/LONDON — Gold dipped 1% to a four-week low on Wednesday as the dollar strengthened and markets looked ahead to a speech by Federal Reserve Chair Janet Yellen that will be closely watched for further clues on US interest rate policy.

Ms. Yellen is scheduled to address a meeting of central bankers in Jackson Hole, Wyoming, at 10 a.m. EDT (1400 GMT) on Friday. Recent hawkish comments from Fed policy makers have raised investors’ expectations that she might adopt a less cautious tone on rates.

Rising US interest rates increase the opportunity cost of holding non-yielding bullion and boost the dollar, in which gold is priced.

Dollar strength helped push gold lower on Wednesday.

Spot gold was down 1% at $1,324.66 an ounce by 3:06 p.m. EDT (1906 GMT).

US gold futures for December delivery settled down 1.20% at $1,329.70, with more than 12,000 contracts trading within one minute at 8:41 a.m., when the price fell a steep $9, tumbling below the 50-day moving average.

“It’s all still up to what happens at Jackson Hole,” UBS analyst Joni Teves said. “Up until then, it’s very hard to make a call.”

“Based on market pricing, it seems there is a general expectation for a December move, so ( the statement) would have to be quite hawkish for markets to bring forward that expectation to September,” she said.

According to the CME Group’s Fedwatch tool, markets are pricing in a 21% chance of a rate increase at the Fed’s September policy meeting, and a 50% chance of at least one rise by the end of the year. The US central bank also has scheduled policy meetings for November and December.

“The selling continued and we saw a total of 40,000 contracts in a half- hour period trading down,” said Miguel Perez- Santalla, vice- president of Heraeus Metal Management in New York.

“The talk is that expectations are that the Fed, after the Jackson Hole meeting, will come out more hawkish than suspected.”

Spot silver fell for the fourth straight session, and was down 1.20% at $ 18.55 an ounce, after falling to $18.51, the lowest level since June 30.

China’s silver imports in July fell 36%, customs data showed on Wednesday, while platinum imports were down by nearly half. Palladium imports rose 17%.

Platinum was down 1.60% at $ 1,081.40 after falling below its 50- day moving average to $1,071.20, the lowest level since July 25. Palladium fell as much as 2.80% to $676.97, also the lowest point since July 25. —