Gold futures settled sharply higher on Friday as the dollar slid after Fed Chair Jerome Powell said a rate hike is unlikely for now.
Powell said during his speech at the Jackson Hole Symposium this morning that the central bank will likely start reducing its monthly bond purchases before the end of this year, and that rate hikes are unlikely to happen anytime soon.
Powell said the economy has reached a point where it no longer needs as much policy support, indicating the Fed might start reducing the amount of bonds it purchases each month before the end of 2021, provided the economy continues to progress.
However, he added that he still feels there’s “much ground to cover” before rate hikes.
Concerns over uneven economic recovery and geopolitical tensions too pushed up the demand for the safe-haven asset.
The dollar index dropped to 92.63, losing nearly 0.5%. The yield on benchmark 10-year Treasury notes traded at 1.34%, down from a two-week high of 1.375%.
Gold futures for December ended up by $24.30 or about 1.4% at $1,819.50 an ounce. Gold futures gained about 2% in the week.
Silver futures for September ended higher by $0.512 at $24.062 an ounce, while Copper futures for December settled at $4.3320 per pound, up $0.0725 from the previous close.
In economic releases today, data showed personal income in the U.S. increased by 1.1% in July, after a revised 0.2% advance in June. Meanwhile, personal spending rose by 0.3% in July, after rising by an upwardly revised 1.1% in June.
Wholesale inventories in the U.S. increased by 0.6% month-over-month to $722 billion in July, cooling from an upwardly revised 1.2% rise in June, according to a preliminary estimate.
The personal consumption expenditure price index in the U.S.rose 0.4% in July, following a 0.5% increase a month earlier.
The University of Michigan’s consumer sentiment for the US was revised to 70.3 in August, from a preliminary reading of 70.2.
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