Gold Steadies as Risk Appetite Fades With Fed Rate Path in Focus

Gold steadied as investors pulled away from risky assets and waited for more clues on the Federal Reserve’s rate path.

Bullion traded near $3,180 an ounce, after dipping to the lowest level in more than a month earlier. Gold lost haven support in recent weeks as ebbing trade tensions between the US and China stoked risk-on sentiment, although that is now easing.

On Wednesday, signs that there will be fewer Federal Reserve rate cuts than previously anticipated pushed gold to a slump of more than 2%. Traders now await a speech by Fed Chair Jerome Powell later on Thursday, as well as data on US manufacturing, retail sales, initial jobless claims and producer prices.

Tighter monetary policy and higher yields tend to be negative for non-interest bearing gold, but they can also reduce the appetite for riskier assets like stocks and cryptocurrencies.

Gold largely shrugged off comments from President Donald Trump, who said the US might be getting closer to an agreement with Iran to curb the Islamic Republic’s nuclear program. An easing of geopolitical tensions sometimes leads to downward pressure on the safe-haven asset.