Gold heads for its fifth straight monthly decline as the Federal Reserve’s speech indicates the central bank will continue to tighten monetary policy for some time.
Precious metals cut losses on Wednesday as the US dollar weakened after ADP Institute data fell short of estimates. The increase in private payrolls for U.S. companies was the smallest since early 2021, according to a privately held report.
Gold continued its decline last week after Federal Reserve Chairman Jerome Powell stressed the central bank’s commitment to curbing inflation. Gold is now down more than 6% in 2022 and nearing a record high when Russia’s invasion of Ukraine stoked demand for safe-haven assets.
Other officials took a similarly hawkish tone. New York Fed President John Williams said interest rates would someday need to rise above 3.5% to contain inflation pressures. Separately, Richmond Fed President Thomas Birkin said the central bank would “do what it takes” to keep inflation under control.
Meanwhile, Atlanta counterpart Rafael Bostic said the Fed’s mandate to curb inflation was “unshakeable” but that it was ready to slow its pace of gains once prices stabilized.
Officials were vague about the extent of policy moves at the September interest rate meeting. The economy shows new signs of strength, with job openings and consumer confidence both beating expectations, indicating strong household and labor demand, and inflationary pressures at risk of persisting , raising prospects for a third straight rate hike of 75 basis points.
The 132,000 jobs added in August were well below the median estimate of economists, according to the ADP Institute’s National Employment Report. The data will be kept in mind ahead of the government’s nonfarm payrolls report, which is released on Friday.
Spot gold fell 0.3% to $1,718.98 per ounce at 11:19 pm in New York. After hitting its lowest since July 21, gold is set to end August with him down 2.8%. The Bloomberg Dollar Spot Index fell 0.24%. Silver fell to its lowest since July 2020, palladium fell slightly, and platinum was little changed.
Aluminum and copper continued their biggest losses in at least a month as concerns about global growth caught the market.
Both metals slid more than 1% amid wide-ranging sales of everything from crude oil to agricultural products. Fears are growing that the European energy crisis, the Federal Reserve’s monetary tightening and his Covid Zero strategy in China will hit demand for industrial metals.
Aluminum fell 1.4% to $2,357.50 per tonne on the London Metal Exchange as of 4:27 pm local time. Contracts fell 4.1% on Tuesday. Copper narrowed its losses as the world’s largest producer Chile reported a disappointing month of output in July, down 8.6% year-on-year. Metals fell 0.9% in London and zinc fell 0.8%.