Firmer dollar weighs on gold as spotlight shifts to Powell’s speech

By Brijesh Patel

Nov 8 (Reuters) – Gold fell for a third straight session on Wednesday, weighed down by a stronger dollar, while investors looked for more clarity on interest rates from the Federal Reserve chief after mixed messages from a host of U.S. central bank policymakers.

Spot gold was down 0.2% at $1,965.50 per ounce by 0535 GMT after hitting its lowest since Oct. 24 on Tuesday. U.S. gold futures GCcv1 were flat at $1,974.70.

The dollar .DXY extended gains against its rivals, making greenback-priced gold more expensive for other currency holders.

“The geopolitical risk premium is getting digested out and as central banks turned away from rate hikes, it is ultimately pushing yields lower. So, there’s not much of driving catalysts for gold this week,” said Ilya Spivak, head of global macro at Tastylive.

A slew of Fed officials on Tuesday maintained a balanced tone on the central bank’s next decision, but noted they would focus on more economic data and the impact of higher long-term bond yields.

Investors now look forward to comments from Fed Chair Jerome Powell, who is set to speak on Wednesday and Thursday.

“We’re likely to see a restatement of what Powell said about three weeks ago at the Economic Club of New York, and at FOMC (Federal Open Market Committee) last week, which is that the Fed is going to hold rates at these levels, but the hikes are probably done,” Spivak said.

Futures point to a roughly 15% chance of another rate hike by January, but are pricing in a 20% chance that cuts could come as early as March, according to the CME FedWatch tool.

Lower interest rates boost the appeal of zero-yield bullion.

Elsewhere, spot silver fell 0.6% to $22.48 per ounce, while platinum eased 0.3% to $888.53. Palladium XPD= dropped 2.5% to $1,029.12, after hitting its lowest since October 2018 at $1,016.06 earlier in the session.