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Gold heads south ahead of Fed Chair’s remarks
On Wednesday, gold dived due to the fact that traders looked ahead to remarks from Fed Chair Jerome Powell for further clues about the outlook for US monetary policy for the near future.
On the Comex exchange, gold futures hit $1,317.15 a troy ounce, declining by about 0.15%. Besides this, spot gold was worth $1,313.21 per ounce, inching down by 0.15%.
On Wednesday, Powell is expected to deliver an opening statement and respond to questions on US monetary policy at a town hall gathering with tutors in Washington.
The previous week the major US financial institution dropped a hint that its three-year drive to tighten monetary policy will end soon because of soaring headwinds to the American economy.
Besides this, on Tuesday, financial markets digested American leader’s State of the Unionaddress, in which Donald Trump raised the prospect of another government shutdown if his demand for border wall financing is neglected.
Some experts pointed to a probability of another US government shutdown with US leader still keeping to the rhetoric of erecting a border wall. They added that a firmer greenback was taming the yellow metal’s gains.
Estimating the US dollar’s purchasing potential in contrast with its main rivals the USD index jumped by 0.1% being worth 95.92, which appears to be its best outcome since January 25.
A stronger evergreen buck can be a negative for commodities priced in this asset, making them less affordable to those who use other currencies.
As for other metals, silver futures declined by 0.6% ending up with an outcome of $15.74 a troy ounce.
As for palladium futures, they went down by 0.4% concluding the trading session at $1,336.25. Platinum dived by nearly 0.1% being worth $819.30.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.