Gold headed for a fifth straight monthly drop, the longest losing run in four years, as speeches by Federal Reserve officials indicate the central bank will keep monetary policy tight for some time.
(Bloomberg) — Gold headed for a fifth straight monthly drop, the longest losing run in four years, as speeches by Federal Reserve officials indicate the central bank will keep monetary policy tight for some time.
The metal fell to a one-month low on Wednesday, extending a run of losses since a speech last week by Fed Chair Jerome Powell, which stressed the central bank’s commitment to reining in inflation. Gold is now down more than 6% in 2022, having come close to a record high when Russia’s invasion of Ukraine stoked demand for haven assets.
Other officials struck a similarly hawkish tone. New York Fed chief John Williams said Tuesday that interest rates probably need to advance above 3.5% at some point to contain price pressures. Separately, Richmond Fed President Thomas Barkin said the central bank will “do what it takes” to curb inflation.
Meanwhile, Atlanta counterpart Raphael Bostic called the duty to curb inflation “unshakable,” but also said he’d be open to dialing back the pace of increases if prices cooled.
Officials have been vague on how big their policy move will be at the rate decision meeting in September. There are fresh signs of robustness in the US economy, with jobs openings and a consumer confidence gauge both topping forecasts, pointing to strength in household and labor demand that risks sustaining inflationary pressures and raises the prospects for a third straight 75 basis-point interest-rate hike.
The ADP Research Institute’s national employment report Wednesday showed 132,000 jobs added in the US in August, significantly lower than economists’ median forecast. The data will be kept in mind ahead of the government’s nonfarm payrolls report on Friday.
Spot gold declined 0.7% to $1,712.02 an ounce as of 1:33 p.m. in London, after earlier touching the lowest since July 21. It’s down 3% for August. The Bloomberg Dollar Spot Index rose 0.2%. Silver fell to the lowest since July 2020, while palladium and platinum edged lower
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