Gold prices retreated below $1,800 on Wednesday as the US dollar halted its slide, while investors sought cues on the timeline of monetary tapering from the US Federal Reserve’s symposium later this week.
Spot gold declined 0.9% to $1,786.96 per ounce by 11:45 a.m. EDT. US gold futures were down 1.1% at $1,788.90 per ounce in New York.
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Earlier this week, gold surged to its highest in nearly three weeks, driven by a broad retreat in the dollar.
“We’re seeing a slight recovery in the dollar and also some investors taking out profits after big gains,” Carlo Alberto De Casa, market analyst at Kinesis, told Reuters on Wednesday.
“The main market driver for this week is the Jackson Hole symposium. A few days back, people were strongly expecting the Fed to start tapering before the end of the year, now that’s again a question mark.”
The dollar steadied off a one-week low, limiting appetite for bullion from those holding other currencies.
Fed chair Jerome Powell’s speech at the symposium in Wyoming on Friday could shed more light on the timeline for withdrawing stimulus, with some still betting on a less dovish stance.
“Everyone is willing to take a punt that they’re (the Fed) going to maybe take a softer stance to tapering this weekend, and it’s a good thing for gold,” IG Market analyst Kyle Rodda said.
Bullion is often viewed as a hedge against higher inflation that could follow stimulus measures.
(With files from Reuters)