(Bloomberg) — Gold climbed for a third day on a weaker dollar, with traders waiting for more US economic data ahead of a key speech by Federal Reserve Chair Jerome Powell
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Bullion rose as much as 0.7% as the greenback slipped back amid better sentiment in equity markets. Earlier in the week it slid to a three-week low as the dollar rallied on expectations the US economy will outperform Europe’s while the continent is gripped by an energy crisis.
Fed officials have been clear in the run-up to the annual Jackson Hole central bankers’ symposium that they see more tightening ahead to fight inflation, but the size and pace of it remains under question. Powell’s speech on Friday is hotly anticipated by markets trying to gauge the point at which rate hikes will slow down amid some signs higher interest rates are starting to take a toll on the economy.
Gold has been rangebound with a mild bullish bias ahead of the symposium as any dovish forward-looking statements from Powell could undermine the dollar’s strength and boost bullion, said Gnanasekar Thiagarajan, director at Commtrendz Risk Management Services. “With manufacturing activity going down, the central bank is expected to tone down its monetary tightening stance.”
Later Thursday, data on initial jobless claims will be eyed to see if the US labor market is holding up to higher interest rates. Figures on US growth will also provide a broader but more backward-looking view of the economy.
Meanwhile, China stepped up its economic stimulus with a further 1 trillion yuan ($146 billion) of measures to bolster growth and curb the fallout of repeated Covid lockdowns and the crisis in the property market. This could potentially aid gold jewelry demand, which has been hurt by the slowdown earlier this year.
Spot gold rose 0.7% to $1,763.28 an ounce as of 8:31 a.m. in London, after climbing 0.9% in the past two days. The Bloomberg Dollar Spot Index dropped 0.4%. Silver, platinum and palladium advanced.
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