Gold heads for best week in six ahead of key Powell speech

Spot gold was nearly unchanged at $1,917.17 per ounce

Gold steadied on Friday as it headed for its best week since mid-July, with support lent by a pullback in U.S. bond yields ahead of Federal Reserve Chair Jerome Powell’s keynote remarks at the Jackson Hole symposium.

Spot gold was nearly unchanged at $1,917.17 per ounce by 1149 GMT, having risen about 1.5% so far this week. U.S. gold futures shed 0.1% to $1,945.20.

Benchmark 10-year Treasury yields evaporated all weekly gains, supporting non-yielding gold, although the U.S. dollar heading for its six straight weekly rise kept gains in check.

”The price appreciation could be the consequence of some opportunistic buying after having fallen from close to around $2,000 per ounce in July to around $1,900,” said Edward Gardner, commodities economist at Capital Economics.

Two Fed officials on Thursday noted a good chance that no more rate increases will be needed while tentatively welcoming a jump in bond market yields, as momentum was also building among European Central Bank policymakers for a pause in rate hikes amid deteriorating growth prospects.

When Powell speaks later on Friday, he is likely to repeat key ideas from recent central bank meetings and statements that data showing weaker inflation is welcome but the job isn’t finished.

”Markets are already pricing in the increasing possibility of a rate hike. Gold is likely to have a knee-jerk drop if he heads in that direction, but it would be worked off pretty quickly,” said StoneX analyst Rhona O’Connell.

Among other metals, spot silver rose 0.1% to $24.17 per ounce and platinum gained 1.1% to $943.90. Palladium fell 0.7% to $1,231.05.

Silver and platinum are also headed for their best week since July 14, while palladium was set for a second straight weekly decline.