By Ambar Warrick
Investing.com-- Gold prices held recent gains on Wednesday as the dollar retreated slightly on weak economic data, with focus now turning to commentary from the Federal Reserve on the path of interest rates.
Gold futures fell 0.1% to $1,759.25 an ounce, while spot gold fell 0.1% to $1,746.33 an ounce by 21:41 ET (01:41 GMT). But both instruments largely retained gains made on Tuesday, where weak PMI data pulled the dollar index down from a near 20-year high.
But the dollar arrested its losses after Minneapolis Fed President Neel Kashkari said the central bank is set to keep tightening policy until inflation is clearly under control. Such a scenario is likely to be negative for gold prices.
Gold has lost nearly all of its gains this year as a rising dollar and U.S. interest rates pulled traders out of the yellow metal.
Focus is now on Fed Chair Jerome Powell’s address to the Jackson Hole Symposium on Friday, which is expected to provide more cues on monetary policy. Traders broadly expect the Chair to maintain his hawkish stance, which will herald more sharp interest rate hikes this year.
Other precious metals traded lower on Wednesday, but retained most of their gains made on Tuesday. Platinum and silver futures shed 0.5% each.
In industrial metals, copper futures fell 0.4%, after rising 0.6% on Tuesday. While prices of the red metal gained some respite from a dip in the dollar, the outlook for copper has been severely dented by the prospect of slowing economic growth in major importer China.
A severe drought and power shortage in the Sichuan province has spurred the closing of several major factories, impeding broader efforts by the Chinese government to support economic growth after a COVID-driven slowdown this year.