Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Gold Falls to Two-And-a-Half-Year Low on Powell Testimony

Published 2018-07-17, 10:38 a/m
Updated 2018-07-17, 10:48 a/m
© Reuters.  Gold was lower on Tuesday.

© Reuters. Gold was lower on Tuesday.

Investing.com - Gold prices fell to a two-and-a-half year low on Tuesday, as a stronger dollar weighed on the precious metal and Federal Reserve Chair Jerome Powell backed gradual rate increases.

Comex gold futures for August delivery decreased 0.86% to $1,229.20 a troy ounce as of 10:37 AM ET (14:37 GMT).

The price of gold fell as Powell reiterated the central bank should gradually increase interest rates.

The Fed raised rates twice this year and is expected to raise rates at least once more before the end of the year. Higher rates are a negative for gold as the precious metal, which does not pay interest, struggles to compete with yield-bearing assets when rates rise.

However, uncertainty around trade tensions made analysis difficult, he said before the Senate Banking Committee on Tuesday.

“It is difficult to predict the ultimate outcome of current discussions over trade policy as well as the size and timing of the economic effects of the recent changes in fiscal policy,” he said.

Meanwhile the dollar rallied, which also weighed on the metal. Gold falls as the dollar rises, as the precious metal is denominated in the U.S. currency and is sensitive to moves in the dollar.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, rallied 0.31% to 94.56.

Bullion becomes more expensive for holders of other currencies when the dollar rises and cheaper when it falls.

Elsewhere on the Comex, silver futures were down 1.34% to $15.600 a troy ounce. Among other precious metals, Platinum Futures slumped 0.64% to $821.10 while Palladium Futures decreased 0.71% to $907.00 an ounce. Copper futures lost 0.34% to $2.755 a pound.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.