Powell’s hawkish remarks push gold three-week lower, palladium slumps
Palladium tumbled to five-year lows below $1,000 an ounce, hastening a retreat triggered by expectations of surpluses due to the rapid spread of electric vehicles and automakers choosing cheaper platinum for their autocatalysts.
Spot gold fell 0.7% to $1,943.93 per ounce by 9:49 a.m. ET (1449 GMT) and was down 2.4% for the week. U.S. gold futures fell 1.1% to $1,948.60.
Silver fell 1.2% to $22.35.
“Gold will continue to trade sideways to lower in the near term unless we see an escalation in geopolitical events, weak U.S. economic report or if the Fed suggests it is done raising rates,” said Jim Wycoff, senior analyst at Kitco Metals.
“The Israel-Hamas war has not escalated significantly from a market perspective, which is prompting some better risk appetite and pulling money out of gold.”
Bullion has lost over $50 since hitting $2,000 levels last week on escalating tensions in the Middle East. Comments from Fed officials that they are not sure if interest rates are high enough to beat down inflation have dented market expectations that the U.S. interest rates have peaked.
Benchmark 10-year U.S. Treasury yield and the dollar index headed for weekly gains, making non-yielding gold less attractive for investors.
On the physical front, a major festival gave gold demand a boost in India, but early reports suggested purchases were slightly lower compared with last year as higher prices put off some customers.
Platinum fell 1.5% to $846.52, setting it up for its worst week since mid-2021.
Palladium slipped 2.8% to $964.17 per ounce. Both metals are used by car makers in devices to reduce engine emissions.
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