Gold was at an 8-month lows on Thursday ahead of Federal Reserve chairwoman Janet Yellen’s second appearance this week before the US congress.
Gold for August delivery on the Comex division of the New York Mercantile Exchange fell $5.50, or 0.5 percent, to $1,142.40 per ounce. Trade has ranged from $1,140.60 to $1,148.20.
After providing a hawkish testimony for the first of two scheduled hearings, Yellen is expected to reiterate her optimistic view today regarding the timing of the initial interest rate hike.
The timing has investors piling capital into the dollar – the greenback was last 0.6 percent stronger at 1.0890 against the euro.
“The price slide yesterday afternoon was triggered by good US economic data,” Commerzbank said. “What is more, Fed chair Yellen confirmed during her testimony before the US Congress that interest rate hikes later this year would be appropriate assuming that the economy develops as expected.”
Turning to Europe, overnight the Greek parliament approved the reform proposals securing a third bailout from creditors. The 87 billion euro bailout plan needs additional approval from eurozone countries, but the renewed hope should continue to weigh on gold.
“The lower Grexit risk should prevent any noticeable recovery of the gold price,” the bank added
In European data, final consumer inflation of 0.2 percent was as expected as was the core figure at 0.8 percent. The trade balance of 21.2 billion euros fell just short of consensus.
Still to come today will be the minimum bid rate from the eurozone, alongside the corresponding press conference with ECB president Mario Draghi.
In US data, weekly unemployment claims were 281,000, below expectations of 284,000. The Philly Fed manufacturing index is due later along with the aforementioned press conference from Yellen.
While in equities, Germany’s DAX and France’s CAC-40 were up 1.8 percent and 1.9 percent respectively.
As for other precious metals, Comex silver for September delivery was down 13.8 cents to 14.910 per ounce. Trade has ranged from $14.845 to $15.100.
Platinum for October delivery fell $13.40 to $1,008.30 per ounce, while the most actively traded palladium contract was at $631.40, down $11.50.
(Editing by Tom Jennemann)
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