Gold Prices Extend Losses After Upbeat U.S. Data
Gold prices losses after U.S. pushed lower on Wednesday, as the release of upbeat data on U.S. durable goods orders lent further support to the greenback after comments by Federal Reserve Chair Janet Yellen had already sent it higher.
The greenback found support after the Commerce Department said durable goods orders rose more than forecast in August, recovering from a slump in the prior month and bolstering optimism over the U.S. economy.
In a speech on Tuesday, Fed Chair Janet Yellen said that the Federal Reserve needs to continue gradual interest rate hikes despite uncertainty about the path of inflation.
It would be “would be imprudent to keep monetary policy on hold until inflation is back to 2%,” she said.
The U.S. dollar was also boosted ahead of a highly-anticipated U.S. tax plan, set to be unveiled on Wednesday.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, wasup 0.51% at a one-month peak of 93.28.
Gold is sensitive to moves higher in both U.S. rates and the dollar. A stronger dollar makes gold more expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion.
However, geopolitical concerns had not completely disappeared. U.S. President Donald Trump said on Tuesday that a military option for North Korea isn’t the preferred choice but if this were to be the case, it would be “devastating” for Pyongyang.
Elsewhere on the Comex, silver futures declined 0.56% to $17.79 a troy ounce.