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Singapore - 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 US monetary policy over the remainder of 2016.
Bullion for immediate delivery was 0.2% higher at $1 324.44 an ounce at 08:46 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%, hasn’t been extended since July, as speculation mounts that the Fed will raise interest rates, 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 chairperson Stanley Fischer, have made the case for a hike this year. Traders see one-in-three odds of higher rates next month, while there’s a 57% chance of a move in December, up from 51% at the start of this week, according to Fed funds futures.
“Gold has eased this week, with short-term risk to the downside,” Jordan Eliseo, Sydney-based chief economist at trader Australian Bullion, said in an email. “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% purity fell 0.1% to $1 328.58 an ounce on the Shanghai Gold Exchange.
On the Shanghai Futures Exchange, gold for December delivery was little changed at 284.85 yuan a gram, while silver added 0.2% to 4 151 yuan a kilogram Silver gained 0.5%, platinum rose 0.4% and palladium climbed 0.7% on global markets
