Gold Ebbs On Powell’s Comments

Gold Ebbs On Powell's Comments

Gold ebbs slightly on Fed Chairman Powell’s comments this morning after slipping earlier on increased risk appetites.

Powell urged Fed economists to be flexible on forecast methods. The Fed Chairman spoke at the Conference for Research and Statistics. He didn’t comment on his outlook for interest rates, economy.

The Fed chief is scheduled to speak again on Thursday. Market watchers will be closely parsing his comments for signals on monetary policy after receiving a mixed bag from Fed officials over the past few days. The Fed kept interest rates unchanged at 5.25% to 5.50% last week but has boosted them 5.25 percentage points since March 2022 to curb inflation.

Front-month gold futures fell 0.8% Tuesday to settle at $1,973.50 an ounce on Comex, and the December contract dropped 1.3% in the first two days of the week. Bullion gained 6.9% in October after falling 5.1% in September and dropping 2.2% in August. The metal is up 8.1% in 2023. The December contract is currently down $5.90 (-0.30%) an ounce to $1967.60 and the DG spot price is $1960.30..

Chicago Fed President Austan Goolsbee indicated in remarks Tuesday that the central bank has made significant progress in bringing interest rates down while Fed Governor Michelle Bowman said the Fed will likely need to raise rates again.

About 90.4% of investors tracked by the CME FedWatch Tool are betting that the Fed will keep its federal funds rate unchanged in December, while 9.8% expect it to raise rates by 25 basis points. The central bank has raised interest rates only once since May. 

Gold has been subdued since failing to sustain a move above the $2,000-an-ounce resistance level last week after surging about 10% over the past month because of haven demand triggered by the conflict in the Middle East. 

Front-month silver futures decreased 2.8% Tuesday to settle at $22.59 an ounce on Comex, and the December contract retreated 1.3% in the first two days of the week. Silver increased 2.2% last month after decreasing 9.5% in September and slipping 0.6% in August. It’s down 6% in 2023. The December contract is currently up $0.181 (+0.80%) an ounce to $22.770 and the DG spot price is $22.72.

Spot palladium fell 3.9% Tuesday to $1,074.00 an ounce, and it lost 5.3% so far this week. Palladium dropped 10% in October after rising 3% in September and sliding 5.3% in August. Palladium has plummeted 41% so far this year. Currently, the DG spot price is down $17.80 an ounce to $1053.00.

Spot platinum declined 1.7% Tuesday to $898.80 an ounce and decreased 0.9% so far this week. Platinum gained 3.5% in October after declining 6.6% last month and advancing 1.7% in August. Platinum is down 16% in 2023. The DG spot price is currently down $18.90 an ounce to $881.10.

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