Gold drops to more than 3-month low as traders await Powell speech

Gold drops to more than 3-month low as traders await Powell speech

Gold prices slipped to a more than three-month low on Wednesday after upbeat US economic data cemented expectations of more rate hikes this year as investors positioned for a speech by Federal Reserve Chair Jerome Powell’s later on Wednesday. Spot gold fell 0.3 per cent to $1,908.33 per ounce by 0946 GMT (1.46pm UAE time), hitting its lowest since mid-March earlier in the session. US gold futures shed 0.3 per cent to $1,917.40. “Good US economic data remains a headwind for the yellow metal, as it likely keeps Fed officials reiterating a hawkish tone,” UBS analyst Giovanni Staunovo said. US consumer confidence increased in June to the highest level in nearly 1-1/2 years amid renewed labour market optimism, while business spending appeared to hold up in May, indicating the economy remained on a solid footing despite fears of a recession. Investors’ focus has shifted to Powell’s speech at an afternoon policy panel before a European Central Bank Forum in Portugal. The US central bank signalled this month that borrowing costs may still need to rise by as much as half a percentage point by the end of this year. “(But) we still expect at some point the aggressive monetary policy