Gold extends losing streak to fourth day on worries over Fed taper talk

Spot gold was down 0.1% at $1,857.55 per ounce, by 0320 GMT. U.S. gold futures were steady at $1,857.50.

June 16, 2021 / 09:49 AM IST

Gold prices fell on Wednesday for a fourth straight session, hurt by a stronger dollar as investors awaited the outcome of the U.S. Federal Reserve's latest meeting for clues on possible tapering of economic support measures.

Spot gold was down 0.1% at $1,857.55 per ounce, by 0320 GMT. U.S. gold futures were steady at $1,857.50.

"Gold has been down for a few days and this reflects in the building anticipation that (the Fed's) tapering of QE might start faster than the market is currently expecting," DailyFX currency strategist Ilya Spivak said.

"Gold has entered the next leg down. Immediate support at this stage is around $1,850. If we can break that with the help of the (Fed meet) over the next 24 hours, gold might head towards $1,800."

Making gold more expensive for holders of other currencies, the dollar held steady near a one-month high against its rivals.

Close

Data on Tuesday showed U.S. retail sales dropped more than expected in May, while producer prices jumped by 6.6% year-over-year during the month, the largest gain since November 2010.

Recent data showing a spike in U.S. consumer prices have raised concerns over rising inflation. But, Fed officials have said rising inflationary pressures are transitory and ultra-easy monetary settings will stay in place for some time.

The U.S. central bank is expected to acknowledge the first conversations among its policymakers on when and how fast to pare back the massive bond-buying program launched in 2020 at the end of its policy meeting later in the day.

Meanwhile, demand for gold from jewellers and central banks will recover in 2021 but remain below pre-pandemic levels, while buying of bullion by exchange traded funds (ETFs) will fall sharply, consultants Metals Focus said.

Elsewhere, silver rose 0.3% to $27.73 per ounce, palladium eased 0.2% to $2,757.33, while platinum fell 0.2% to $1,151.30.
Reuters
first published: Jun 16, 2021 09:40 am

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark