Gold rises ahead of Federal Reserve’s meeting on tapering
Spot gold rises as investors focus on Fed chief Jerome Powell’s speech for guidance on stimulus tapering
Bengaluru — Gold prices rose on Friday as an increasingly deteriorating security situation in Afghanistan spurred safe-haven demand, though investors were largely focused on Federal Reserve chief Jerome Powell’s speech for guidance on stimulus tapering plans.
Spot gold gained 0.3% to $1,798.22/oz by 3.41am GMT, and was up about 1% for the week. US gold futures rose 0.4% to $1,801.30/oz.
“Safe-haven buying has come from rising geopolitical tensions in Afghanistan. There are some concerns about further escalation there,” said ANZ analyst Daniel Hynes.
Islamic State struck the crowded gates of Kabul airport in a suicide bomb attack on Thursday, killing scores of civilians and at least 13 US troops.
Investors now await Powell’s remarks at the Jackson Hole, Wyoming, symposium at 2pm GMT for any hints about when the Fed will begin tapering its asset purchasing programme.
“What we are looking for here is not a policy change. The Fed will set the stage for a tapering announcement perhaps next month,” said DailyFX currency strategist Ilya Spivak.
“Gold stands to be the most vulnerable, the dollar stands to benefit the most ... critical support for gold is around $1,750. If that gets taken out, I can see it testing $1,700.”
On Thursday, Fed’s hawkish policymakers urged the central bank to begin paring bond purchases they feel have become ineffective.
St Louis Fed president James Bullard, along with Kansas City Fed president Esther George and Dallas Fed president Robert Kaplan, also downplayed the impact of the Delta variant.
The hawkish comments helped the dollar index bounce off a one-week low marked in the previous session.
Elsewhere, silver rose 0.3% to $23.60/oz and was headed for its biggest weekly gain since May.
Platinum climbed 0.6% to $985.24/oz but was down about 1% for the week.
Palladium advanced 0.6% to $2,405.83/oz and was headed for it best weekly performance since late June with a rise of 5.8%.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.