Monday, October 18, 2021

Gold Down, but Heads Towards Fourth Weekly Gain Over Powell Reassurance

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imageCommodities45 minutes ago (Jul 16, 2021 12:23AM ET)

(C) Reuters.

By Gina Lee

Investing.com – Gold was down on Friday morning in Asia but was headed for a fourth consecutive weekly gain. The yellow metal was boosted by U.S. Federal Reserve Chairman Jerome Powell’s insistence that any inflation will be transitory and that the central bank would continue to support the economy.

Gold futures inched down 0.05% to $1,828.10 by 12:20 AM ET (4:20 AM GMT) but gained 1.2% so far this week. The dollar, which usually moves inversely to gold, inched down on Friday.

Powell’s comments were given during his second day of testimony before the House of Representatives Financial Services Committee on Thursday, where he repeated his pledge of “powerful support” for the U.S. economic recovery from COVID-19.

However, investors widely expect that the Fed will begin asset tapering by the end of 2022. Some even predicted an interest rate hike as early as 2022 but acknowledged that recent COVID-19 outbreaks involving the Delta variant remain the biggest economic risk.

In Asia, the Bank of Japan (BOJ) left its yield curve control (YCC) target unchanged at -0.1% for short-term interest rates and 0% for 10-year bond yields as it concluded a two-day meeting earlier in the day.

Investors also continued to digest the second-quarter GDP figure from China, a leading consumer of gold. As higher raw material costs and new COVID-19 outbreaks led to slower growth, expectations are growing that policymakers may have to do more to support the economic recovery.

Meanwhile, Barrick Gold (NYSE:GOLD) Corp said on Thursday its second-quarter gold production fell 5.4% from the previous quarter. Planned maintenance shutdowns at Nevada Gold Mine in the U.S. and Pueblo Viejo in the Dominican Republic contributed to the decline.

In other precious metals, silver was flat and palladium inched up 0.1%, while platinum inched down 0.1%.

Gold Down, but Heads Towards Fourth Weekly Gain Over Powell Reassurance

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