PRECIOUS-Gold slides 1% on dollar strength, Fed verdict in focus

Credit: REUTERS/STAFF

Gold retreated 1% on Wednesday, sliding further below the $1,800 level as the dollar ticked higher and investors hoped for a timeline for the tapering of economic support from the U.S. Federal Reserve at this week's Jackson Hole symposium.

By Arundhati Sarkar

Aug 25 (Reuters) - Gold retreated 1% on Wednesday, sliding further below the $1,800 level as the dollar ticked higher and investors hoped for a timeline for the tapering of economic support from the U.S. Federal Reserve at this week's Jackson Hole symposium.

Spot gold XAU= was down 0.9% at $1,786.01 per ounce by 10:43 am EDT (1443 GMT), while U.S. gold futures GCv1 fell 1.1% to $1,788.10.

Bullion rallied 1.4% on Monday to the highest in nearly three weeks, driven by a broad retreat in the dollar this week.

Prices have however, been on a downward trajectory as the dollar .DXY steadied off a one-week low, limiting appetite for the metal as a stronger dollar increases its price for holders of other currencies. USD/MKTS/GLOB

"There has been a boost in risk appetite and the dollar has also climbed up resulting in some consolidation in the metal," said Bart Melek, head of commodity strategies at TD Securities, adding some investors were also taking profits.

Jerome Powell is to speak on Friday at the Fed's annual economic symposium at Jackson Hole, Wyoming, which had to be moved online because of a U.S. COVID-19 surge.

Investors remain divided over whether they will get a roadmap on when the U.S. central bank may start trimming its bond-buying program and if Powell would tone down the Fed's hawkish tone, in turn helping gold.

"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," Carlo Alberto De Casa, market analyst at Kinesis.

Some investors view gold as a hedge against higher inflation that could follow stimulus measures.

Silver XAG= eased 0.6% to $23.69 per ounce, while palladium XPD= shed 1% to $2,448.92.

Platinum XPT= fell 1.8% to $993.50.

(Reporting by Arundhati Sarkar in Bengaluru; editing by Barbara Lewis)

((Arundhati.Sarkar@thomsonreuters.com; twitter.com/Arundhati_05; +1 646 223 8780 Ext: 2776))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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