Reuters logo
PRECIOUS-Gold slips on firmer dollar ahead of Jackson Hole meeting
August 24, 2017 / 10:20 AM / a month ago

PRECIOUS-Gold slips on firmer dollar ahead of Jackson Hole meeting

    * Huge fund long position key to market-analyst
    * Investors await speeches by Yellen, Draghi
    * Dollar steadies on concern about Fed policy

 (Updates prices)
    By Eric Onstad
    LONDON, Aug 24 (Reuters) - Gold drifted lower on Thursday,
pressured by a firmer dollar as investors waited for signals
about interest rates from central bankers meeting in Jackson
Hole.
    Losses were limited, however, after threats by U.S.
President Donald Trump to shut down the government unless he got
funding for a border wall with Mexico.             
    Key to the direction of the market were funds holding huge
long positions in Comex gold futures, said Ole Hansen, head of
commodity strategy at Saxo Bank in Copenhagen.             
    "We've had two failed attempts at the upside this year which
resulted in a flush out of longs, and the longer we stay here
without breaking higher, the bigger the risk that these guys
will start to get impatient," he said.
    Gold failed in both April and June to break through the top
of its broad $1,200-$1,300 range this year.
    "But at the same time, there's this threat to close down the
U.S. government by Trump if he doesn't get his wall so that's
providing some underlying support. It's well and truly wait and
see." 
    Spot gold        was down 0.2 percent at $1,287.10 an ounce
by 1251 GMT, after gaining 0.4 percent in the previous session.
    U.S. gold futures         slipped 0.2 percent to $1,292.20
per ounce.
    "The market is pricing in the Federal Reserve's actions at
the Jackson Hole meeting and people are expecting some kind of
tightening going on in that space. So that's why gold is going
to be under some kind of pressure," said Richard Xu, a fund
manager at China's biggest gold exchange-traded fund, HuaAn
Gold.     
    Markets were focused on an annual meeting of central bankers
in Jackson Hole, Wyoming, starting on Thursday, where Federal
Reserve Chair Janet Yellen and European Central Bank chief Mario
Draghi are set to deliver speeches on Friday on the outlook for
monetary policy and interest rates.
    ECB's Draghi on Wednesday warned against hasty policy
responses and said gaps in understanding the workings of new
policies remain.             
     Gold is highly sensitive to rising U.S. interest rates, as
these increase the opportunity cost of holding non-yielding
bullion, while boosting the dollar, in which it is priced.
     The dollar steadied on Thursday after another
politically-driven slide against the euro and yen, helped by
nerves over what message Federal Reserve policymakers will send
during meetings in Jackson Hole starting later in the day.      
    Silver        fell 0.4 percent to $16.94 an ounce, while
platinum        was flat at $976.95 an ounce.
    Palladium        shed 0.2 percent to $931.
    

 (Additional reporting by Apeksha Nair in Bengaluru; Editing by
Susan Thomas and Mark Potter)
  

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below