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Gold in the Red Ahead of Jackson Hole Speeches, Posts Small Weekly Gain

August 25, 2017 at 14:17 by Andrew Moran

Gold futures are in the red on the final trading session of the week. The yellow metal is slipping ahead of two key Jackson Hole speeches by Federal Reserve Chair Janet Yellen and European Central Bank (ECB) President Mario Draghi. Gold prices are still poised for a narrow weekly gain.

December gold futures tumbled $4.10, or 0.32%, to $1,287.90 per ounce at 14:00 GMT on Friday. Gold is on track for a weekly gain of 0.2% as the precious metal topped $1,300 earlier this week.

Silver, the sister commodity to gold, is also bleeding red ink at the end of the trading week. September silver futures slid $0.02, or 0.14%, to $16.92 an ounce. The white metal will trade flat for the week.

The precious metals are being impacted by the Jackson Hole retreat of central bankers this weekend. Yellen and Draghi are expected to deliver speeches; the Fed head will likely talk about the normalization of interest rates and Draghi will espouse on the ECB’s ultra-loose monetary policy. Gold is generally sensitive to a rising-rate environment because it lifts the opportunity cost and sends traders into yield-bearing instruments.

Gold and silver were further affected by a climbing US dollar as the greenback rose 0.08%. A stronger US dollar is bad for commodities like gold and silver because it makes it more expensive for foreign investors to acquire.

Precious metals were unable to gain any momentum from recent weak economic data. Orders for durable goods in July suffered the largest decline since 2014 and US jobless claims were modest.

US political and financial uncertainty and geopolitical tensions helped gold limit its losses. With the Trump administration bracing for a debt ceiling showdown with both the Republicans and Democrats and North Korea remaining belligerent, investors continue to pour into the yellow metal as a safe-haven play.

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