Gold Futures Settle Lower As Dollar Rises Ahead Of Powell's Speech

Gold prices dropped on Tuesday as the dollar climbed higher ahead of Fed Chair Jerome Powell’s speeches due on Wednesday and Thursday.

A surge in Treasury yields lifted the greenback, and resulted in a drop in demand for the safe-haven yellow metal. The dollar also found support from comments by Minneapolis Federal Reserve Bank President Neel Kashkari that he’s not convinced rate hikes are over.

The dollar index surged to 105.78 around mid morning, and despite easing to 105.55, remains well above the flat line, gaining about 0.31%.

Gold futures for December ended down $15.10 at $1,973.50 an ounce.

Silver futures for December ended lower by $0.645 at $22.589 an ounce, while Copper futures for December settled at $3.6790 per pound, down $0.0400 from the previous close.

“Gold has broken lower today, appearing to enter into a correction phase after failing to significantly break above $2,000 on a number of occasions. Perhaps we’re seeing an unwind of some of the geopolitical risk in the markets or just a technical correction in the rally over the last month but the last couple of sessions haven’t been great,” says Craig Erlam, Senior Market Analyst at OANDA, UK & EMEA.

Fed Chair Powell is due to deliver opening remarks at the Division of Research and Statistics Centennial Conference on Wednesday and participate in a policy panel discussion before the 24th Jacques Polak Annual Research Conference on Thursday.

Traders are likely to pay close attention to Powell’s remarks, looking for additional confirmation the Fed will leave interest rates unchanged for the foreseeable future.

In U.S. economic news today, a report released by the Commerce Department showed the U.S. trade deficit widened by more than expected in the month of September.

The report said the trade deficit increased to $61.5 billion in September from a revised $58.7 billion in August. Economists had expected the trade deficit to climb to $60.2 billion from the $58.3 billion originally reported for the previous month.

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