Gold Trims Fourth Weekly Gain as Powell Defends Fed Stimulus

Gold casting grain in a foundry. (Photographer: Andrey Rudakov/Bloomberg)

Gold Trims Fourth Weekly Gain as Powell Defends Fed Stimulus

Gold trimmed a fourth weekly gain as Treasury yields clawed back some losses made in the wake of dovish comments from Federal Reserve Chair Jerome Powell.

Powell defended the central bank’s continued support for the U.S. economy on Thursday even as inflation runs at uncomfortable levels, reiterating comments made this week that it was still too soon to scale back stimulus. That saw Treasury yields extend declines to near the lowest since February on Thursday, before partially rebounding Friday and denting demand for gold as an alternative.

Still, bullion is up about 0.3% this week, helped by a slide in inflation-adjusted bond yields. Investors are closely watching for clues on the outlook for monetary policy as inflation runs hotter than expected. So far, most policy makers see price pressures as temporary and not worrying enough to change course on stimulus.

Gold “investors seemed to be buying the dips lately,” said Margaret Yang, a strategist at DailyFX. “Powell’s reiteration of his dovish stance soothed tapering fears and bolstered the appeal of the yellow metal.”

Gold Trims Fourth Weekly Gain as Powell Defends Fed Stimulus

Spot gold slipped 0.8% to $1,814.20 an ounce by 1:47 p.m. in New York, after touching the highest since June 16 on Thursday.

Futures for August delivery on the Comex fell 0.8% to settle at $1,815. Spot silver, palladium and platinum retreated. The Bloomberg Dollar Spot Index was steady.

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