Gold prices drifted lower on Thursday.
Gold traders await the speech from U.S. Federal Reserve Chairman, Jerome Powell scheduled to hold later today, for better guidance on the monetary policies of the world’s largest economy
Gold futures were down 0.6% to trade at $1,944.5 per ounce by 0716 GMT, after gaining over 1% yesterday on high hopes of more stimulus measures.
READ: Forex: U.S dollar plunges against major currencies, investors remain jittery
U.S. Federal Reserve Chairman Jerome Powell is expected to address the Fed’s annual central bankers’ conference at 1310 GMT, with gold traders looking for any hints of the bank’s strategy on inflation and monetary policy.
Stephen Innes, Chief Global Market Strategist at AxiCorp in a note to Nairametrics spoke about the fundamentals that could keep the yellow metal on the defensive. He said;
“Gold rallies alongside lower US dollar. But if US Fed Chair Powell’s speech does not meet dovish expectations, gold may stall and move back in reverse.
READ: Crypto: Why Tether became a U.S. dollar replacement for many Chinese
“Gold was mostly on the defensive in the Asian session and most of the European trading as US yields moved higher, suggesting gold was about to settle into a very defensive posture.
“But then gold received a boost in US trading as investors continue to monitor US fiscal developments. Gold investors’ eyes and ears are trained on Powell’s scheduled address at the Jackson Hole Symposium on Thursday.
“Expectations of hints of more monetary stimulus bolstered gold, but the buying was against very thin selling.”
READ: UPDATED: CBN holds MPR at 13.5%, other parameters amidst recession concerns
However, what remains important for the precious metal pricing in the long term, is the quantitative easing approach and the data coming from COVID-19 caseloads.