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Gold Prices Hold Steady Ahead of Fed’s Powell

Investing.com - Gold prices held steady around the unchanged mark on Thursday as investors awaited remarks from Federal Reserve Chairman Jerome Powell amid expectations that the head of the central bank will reaffirm a pause in policy tightening.

At 10:00 AM ET (15:00 GMT), gold futures for February delivery on the Comex division of the New York Mercantile Exchange inched up 70 cents, or 0.05%, to $1,292.70 a troy ounce.

Higher interest rates tend to weigh on demand for gold, which doesn’t bear interest, in favor of yield-bearing investments.

Powell will speak at an event at the Economic Club of Washington, D.C. The lunch and program portion is slated to start at 12:00 PM ET (17:00 GMT), while Powell is scheduled for a discussion at 12:45 PM ET (17:45 GMT).

Powell’s last appearance sent stocks soaring as he noted that the Fed could be “patient” on further policy tightening. Markets currently price in that the central bank will be on pause all throughout 2019 and put about a 14% chance that it will actually cut interest rates by the end of the year.

Presidents of four of the 12 Fed regional banks on Wednesday said they wanted greater clarity on the state of the economy before extending the central bank's rate hike campaign any further, suggesting that the Fed could take months before another increase is undertaken.

St. Louis Fed President James Bullard, considered the most dovish policymaker, even suggested that further tightening could tip the U.S. economy into recession.

"We have got the markets pricing in the possibility of a Fed rate cut rather than a hike in the year ahead," Rodda said, adding that the Fed minutes gave the dollar a bit of a "kick down".

"Gold is getting a bit of support out of a dovish Fed and institutional instability in the U.S," said Kyle Rodda, a market analyst at IG, Australia.

In other metals trading, silver futures dropped 0.19% at $15.705 a troy ounce by 10:01 AM ET (15:01 GMT).

Palladium futures advanced 0.39% to $1,274.30 an ounce, while sister metal platinum gained 0.24% at $827.30.

In base metals, copper fell 0.72% to $2.638 a pound.

-- Reuters contributed to this report.

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