By Gina Lee
Investing.com – Gold was down on Thursday morning in Asia, with the dollar strengthening after the U.S. Federal Reserve hinted that it could begin asset tapering as soon as 2021 in the minutes from its latest meeting.
Gold futures were down 0.25% to $1,780 by 12:49 PM ET (4:49 AM GMT), set for their biggest one-day percentage decline since Aug. 9. The dollar, which normally moves inversely to gold, was up on Thursday as it surpassed a nine-month peak.
The minutes from the Fed’s July meeting, released on Wednesday, said that officials saw the potential to begin asset tapering in 2021 providing that the economic recovery remains within expectations.
Meanwhile, Bank Indonesia will hand down its policy decision later in the day.
“Gold lost a little bit of upside momentum as investors increasingly grew wary of the risk that the Fed could start asset tapering by the end of 2021,” IG Market analyst Kyle Rodda told Reuters.
Investors now await the Fed’s Jackson Hole symposium, due to take place from Aug. 26 to 28. Investors’ speculation about Fed asset tapering, and about what will be said on that subject at the symposium, will determine gold’s price action over the next couple of days, said Rodda.
Other investors remained cautious.
Gold is “still short of recapturing the key $1,800 level that would be prerequisite to the yellow metal regaining some bullish shine,” Phillip Futures senior commodities manager Avtar Sandu said in a note.
In other precious metals, silver slid 1.6% and platinum fell 0.8%. Palladium was down 0.3% to $2,418.86, after hitting its lowest level since Mar. 16.