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PRECIOUS-Gold retreats as dollar gains; all eyes on Powell speech

Published 26/08/2020, 01:39 pm
© Reuters.
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* Dollar gains, global stocks steady

* U.S. consumer confidence hits six-year low

* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Recasts, adds comments, updates prices)

By Brijesh Patel

Aug 26 (Reuters) - Gold fell on Wednesday as the dollar strengthened, with investors awaiting U.S. Federal Reserve Chairman Jerome Powell's speech for monetary strategy cues, but worries over the pandemic-ravaged global economy kept prices above the $1,900 mark.

Spot gold XAU= was down 0.5% at $1,918.77 per ounce by 0651 GMT. U.S. gold futures GCcv1 edged 0.1% higher to $1,925.30.

Gold's retreat toward a key support level of $1,910 "is partly attributed to the U.S. dollar's intra-day rebound, as traders await Powell's speech", said DailyFx strategist Margaret Yang.

The dollar index .DXY rose 0.2% against rivals, making gold expensive for other currency holders, with focus on Powell's speech at Jackson Hole on Thursday, expected to provide further clarity on the U.S. central bank's view on inflation and monetary policy. USD/

Safe-haven inflows into gold also curbed after top U.S. and Chinese trade officials reaffirmed their commitment to a Phase 1 trade deal between the world's top two economies. MKTS/GLOB

"The U.S.-China trade news overnight that the tensions have eased slightly has dulled investors appetite for safe-havens a bit but obviously there is a lot of water to go under that bridge," ANZ analyst Daniel Hynes said.

Gold's overall trajectory remained positive, analysts said, with the metal gaining 27% so far this year as investors seek a hedge against possible inflation and currency debasement due to unprecedented money printing by central banks and near-zero interest rates globally.

"There are still a lot of concerns about the economy and they continue to indicate that rates are going be low and stimulus measures will continue, which should boost gold," Hynes added.

Adding to doubts over an economic rebound from the coronavirus crisis, a survey from the Conference Board showed U.S. consumer confidence unexpectedly hit a six-year low in August. XAG= fell 0.3% to $26.33 per ounce, platinum XPT= dropped 0.4% to $922.99, while palladium XPD= gained 0.6% to $2,178.14.

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