NEW YORK/LONDON: Gold prices edged up as US equities slipped, but gains were limited after Federal Reserve chair Janet Yellen said US labour markets remain hampered by the effects of the Great Recession.
For the week, gold lost about two per cent, its biggest weekly loss in five, as speculation over an early interest rate hike following the latest Fed minutes earlier this week weighed heavily on the yellow metal.
In a speech at a central banking conference in Jackson Hole, Wyoming, Yellen said the US central bank should move cautiously in determining when interest rates should rise, as economic disruption of the last five years has left millions of workers sidelined, discouraged, or stuck in part-time jobs.
Gold prices continued to hover just above a two-month low reached on Thursday. Bullion has dropped about three per cent in the past five sessions, underperforming US Treasury bonds, which are considered the preferred safe-haven investment, traders said.
“I see no reasons to own gold, which is likely to trend lower with rallies being sold. The Treasury yields at under three per cent and crude oil prices showing signs of a recession are significant headwinds for precious metals,” said Jonathan Jossen, COMEX gold options floor trader in New York.
Spot gold was up 0.3 per cent at US$1,280.29 an ounce, not far from a two-month low of US$1,273.06 hit on Thursday. The metal is down 1.9 per cent for the week, the biggest drop since the week ended July 18.
US COMEX gold futures for December delivery settled up US$4.80 at US$1,280.20 an ounce.
US crude oil futures fell on Friday for a fifth straight week of declines on worries about plentiful supplies. Oil prices have also dropped more than four per cent in the last 10 sessions, while the S&P equities index fell after investors got few clues about the course of interest rates from Yellen.
Physical demand for gold in major consumers China and India remained weak. Analysts, however, expected buying from India to increase heading into the festival and wedding season, when it is traditionally considered auspicious to buy the metal.
Among other precious metals, silver was down 0.1 per cent at US$19.40 an ounce.
Platinum rose 0.3 per cent to US$1,416.25 an ounce, snapping a nine-day losing streak, its longest since July 2008. Spot palladium climbed 1.3 per cent to US$885.25 an ounce. — Reuters