August 26, 2016
Gold Near One-Month Low as Investors in Waiting-for-Yellen Mode
(Bloomberg) - Gold traded near a one-month low after a five-day skid as investors ticked off the hours until an address by Federal Reserve Chair Janet Yellen that may give clues about the likelihood of tighter U.S. monetary policy over the remainder of 2016.
Bullion for immediate delivery was little changed at $1,323.67 an ounce at 11:23 a.m. in Singapore after dropping on Thursday to $1,318.18, the lowest level since July 27, according to Bloomberg generic pricing. The metal is heading for a weekly loss.
Gold’s blistering rally in the first half of the year, when prices surged 25 percent, hasn’t been extended since July amid rising concern that the Fed may raise interest rates, potentially blunting bullion’s appeal. In the lead up to Yellen’s remarks on Friday at a central bankers’ gathering in Jackson Hole, Wyoming, several policy makers, including Vice Chairman Stanley Fischer, have made the case for a hike this year. Fed funds futures indicated a 57 percent chance of a move in December, up from 51 percent at the start of this week.
“Gold has eased this week, with short-term risk to the downside,” Jordan Eliseo, Sydney-based chief economist at trader Australian Bullion Co., said in an e-mail. “Fischer has suggested another rate hike could be in order this year, though market expectations may well change dependent on any clues that come out of Jackson Hole.”
Holdings in bullion-backed exchange traded funds added 0.45 metric ton to 2,033.7 tons on Thursday, data compiled by Bloomberg show.
In China, bullion of 99.99 percent purity fell 0.2 percent to 284.29 yuan a gram ($1,326.94 an ounce) on the Shanghai Gold Exchange.
On the Shanghai Futures Exchange, gold for December delivery was little changed at 284.80 yuan a gram, while silver added 0.2 percent to 4,153 yuan a kilogram.
Silver gained 0.6 percent, platinum rose 0.4 percent and palladium climbed 0.6 percent on global markets.