London: Gold headed for its first daily gain in more than a week as traders wait for a speech by Federal Reserve Chair Janet Yellen that may give clues on the probability of tighter US monetary policy this year.
Bullion for immediate delivery rose 0.3 per cent to $1,326.41 an ounce by 12:18pm in London after touching $1,318.18 on Thursday, the lowest level since July 27, according to Bloomberg generic pricing. The metal is heading for its biggest weekly drop in six.
Gold’s blistering rally in the first half, when prices surged 25 per cent, has stalled since July as speculation mounts that the Fed will raise rates, blunting bullion’s appeal.
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In the lead up to Yellen’s remarks at a central bankers’ gathering Friday in Jackson Hole, Wyoming, several policymakers including Vice-Chairman Stanley Fischer have made the case for a hike this year. Traders see one-in-three odds of higher rates next month, while there’s a 57 per cent chance of a move in December, up from 51 per cent at the start of this week, according to Fed funds futures.
“The metal has been drifting lower this week with tactical traders reducing bullish bets ahead of what could be a key event,” Ole Hansen, head of commodity strategy at Saxo Bank A/S, said by email. “The current price swing has, to a great deal, been contributed by swings in the dollar, where many currently don’t know what leg to stand on.”
The Bloomberg Dollar Spot Index fell for a second day after gaining in the first three days of the week.
