Gold futures fell more than $20, falling off the $1,750 level today. After Federal Reserve Chairman Jerome Powell reiterated that the Fed would continue to raise interest rates to curb inflation. And there is a tendency for the Fed to raise interest rates big in September.
In addition, gold prices were also pressured by the dollar’s appreciation. and the rebound in US government bond yields
At 10.25 pm Thai time, the COMEX (Commodity Exchange) gold contract will be delivered in December. It fell $22.60, or 1.28%, to $1,748.80 an ounce.
A stronger dollar will reduce the attractiveness of gold. by making gold contracts more expensive for holders of other currencies. As the rebound in US Treasury yields increases the opportunity cost of holding gold. Because gold is an asset that does not return in the form of interest.
Mr Powell said The Fed’s mission to combat inflation isn’t over yet. The Fed will continue to tighten monetary policy. This may affect the economic expansion and labor market of the United States.
“We will continue to raise interest rates. Until we are confident that our mission will be successful. Households and businesses may be affected by the Fed’s continued rate hike. But failure to stabilize prices will have a bigger impact,” Powell said at the Fed’s annual meeting in Jackson Hole today.
In addition, Mr Powell said The Fed still needs to raise interest rates. And the Fed won’t cut its options. “Raise interest rates bigger than usual” in September.
Powell stressed that the Fed needed to act quickly. What has happened in the past reflects that too late action will cause the labor market to collapse heavily.
“Although the slowdown in inflation in July is a welcomed thing. But just one month of data isn’t enough to convince the Fed board that inflation has settled,” Powell said.
The US Department of Commerce said that Basic personal consumption expenditure (PCE) price index, excluding food and energy It is the Fed’s key gauge of inflation, up 4.6 percent in July year-on-year. It fell below analysts’ forecast of 4.8% and slowed from 4.8 percent in June.
The PCE Index is a measure of inflation that can detect changes in consumer behavior. And it covers a broader range of prices for goods and services than the Consumer Price Index (CPI) data from the US Department of Labor.