BENGALURU, Aug 26 (Reuters): Gold prices fell on Wednesday as the dollar gained, while investors waited for US Federal Reserve Chairman Jerome Powell's speech for a snapshot of the central bank's monetary plan to revive the pandemic-hit economy.
Spot gold was down 0.5 per cent at $1,918.59 per ounce by 0954 GMT. US gold futures edged up 0.1 per cent to $1,924.60.
The dollar index was up 0.1 per cent, making bullion more expensive for those holding other currencies, with the spotlight on Powell's address at Jackson Hole on Thursday, set to offer more insight on the US central bank's strategy on inflation and monetary policy.
"The firmer dollar is weighing on gold ... Though investors are watching out for Powell's speech, they've mostly factored it into gold prices already. The US cannot raise interest rates and lowering them also doesn't look likely," said Michael Hewson, chief market analyst at CMC Markets UK.
"The Fed might take an unconventional measure, like more stimulus ... As long as social distancing is in place, the economy cannot rebound and that will keep supporting gold till the year-end."
Weighing further on gold, optimism about US-China trade relations boosted appeal for riskier assets.
Nonetheless, gold's outlook remained strong as buyers sought a buffer against potential inflation and currency debasement due to central bank stimulus and near-zero global interest rates.
The safe-haven metal is up 27 per cent so far this year.
Gold falls on firm dollar
FE Team | Published: August 26, 2020 21:58:49
Gold falls on firm dollar
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