By Gina Lee
Investing.com – Gold was down on Thursday morning in Asia, with investors cautious ahead of a U.S. Federal Reserve symposium that could provide cues to a timeline for asset tapering.
Gold futures inched down 0.10% to $1,789.15 by 12:16 AM ET (4:16 AM GMT). They fell 0.7% during the previous session, the biggest one-day decline in more than two weeks.
“You’re probably going to see a continued consolidation in gold, but likely to the downside until we get past Jackson Hole,” OANDA senior market analyst Edward Moya told Reuters.
The Fed’s Jackson Hole symposium will open later in the day, with Fed Chairman Jerome Powell delivering a speech on Friday. Although an increasing number of Fed officials have signaled that asset tapering could begin earlier than expected, COVID-19 outbreaks globally continue to cloud the economic outlook and cast doubts over this view.
“Once we are beyond Jackson Hole the market is still going to anticipate that the Fed is going to taper asset purchases, but they’re going to disconnect interest rate hikes from that,” said Moya, adding that the low interest rate environment is likely to last longer and should support gold prices.
However, other central banks are ahead of the Fed, with the Bank of Korea (BOK) hiking its interest rate as it handed down its policy decision earlier in the day. BOK’s interest rate for August is 0.75%, up by 25 basis points from the previous 0.5% and within expectations, and South Korea is now the first major Asian economy to hike interest rates since COVID-19 began.
Holdings of SPDR Gold Trust (P:GLD) fell 0.3% to 1,001.72 tonnes on Wednesday, the lowest level since April 2020.
In other precious metals, silver was little changed at $23.85 per ounce, while platinum dropped 1% and palladium slid 1.5%.