Investing.com - Gold prices dropped on Thursday as the dollar remained near a three-week high. U.S. Federal Reserve Chairman Jerome Powell’s comments this week implied increasing interest rates and continued to put pressure on the precious metal prices.
Gold Futures for August delivery on the Comex division of the New York Mercantile Exchangeis traded at $1,224.6 per troy ounce at 12:48AM ET (04:48 GMT), down 0.27% from the previous session.
The fall in gold prices came as the dollar held firm against its peers following bullish comments from Powell. The U.S. Dollar Index remained unchanged at 94.84 on Thursday after hitting a three-week high of 95.407 the previous day.
Alan Gayle, president of Via Nova Investment Management LLC in Fredericksburg, Virginia, said “Strengthening economic growth and a confident Fed is helping to support the dollar. Higher short-term interest rates make the dollar more attractive relatively to other currencies.”
Echoing the future increase in interest rates is the Bank of England in the UK. Its Monetary Policy Committee Michael Saunders said in early July that the bank might surprise markets with a swifter raise in interest rates than expected.
Saunders said, “If the economy plays out as I expect, it may be that rates need to go up a little faster than that…the general picture is still limited and gradual, not too far and not too fast.”
On the trade front, White House economic advisor Larry Kudlow said trade talks with China have paused for now, although discussions with the European Union have been more promising, and that the administration expects a significant trade offer to come from the European Union soon.