FRX: Gold futures decline as markets focus on Jackson Hole meeting
Forexpros - Gold futures were lower during U.S. morning trade on Tuesday, as investors looked ahead to the annual Jackson Hole economic symposium later this week and whether Federal Reserve Chairman Ben Bernanke would drop any hints of further stimulus measures for the U.S. economy.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,664.55 a troy ounce during U.S. morning trade, shedding 0.5%.
Earlier in the day, prices fell by as much as 0.95% to hit a session low of USD1,657.65 a troy ounce. Prices rallied to USD1,677.45 a troy ounce on Monday, the highest since April 13.
Gold futures were likely to find support at USD1,634.55 a troy ounce, the low from August 22 and near-term resistance at USD1,677.45, the previous session’s high.
Gold prices have rallied in recent sessions amid growing hopes policymakers in the U.S., Europe and China will introduce fresh easing measures to prop up their respective economies.
Minutes of the Federal Reserve’s August meeting released last week showed that “many members” think additional easing may be warranted "fairly soon" unless there is evidence of a "substantial and sustainable" strengthening in the economic recovery.
In addition, Fed Chairman Ben Bernanke told a congressional oversight panel that the U.S. central bank has room to deliver additional monetary stimulus to boost the U.S. economy.
Gold traders looked ahead to a speech by Bernanke at an annual symposium in Jackson Hole, Wyoming at the end of the week, amid ongoing speculation over how close the U.S. central bank is to implementing more stimulus measures.
He has used the event the previous two years to flag the Fed's intention on more easing.
Traders were also looking ahead to the release of U.S. second quarter gross domestic product data set for Wednesday.
Moves in the gold price this year have largely tracked shifting expectations as to whether the Fed would pump more money into the financial system.
Gold gained as much as 15% earlier this year to hit USD1,790 an ounce after the Fed said in January it would keep interest rates near zero until at least late 2014 and indicated that it could introduce a fresh round of asset-purchases.
However, prices have lost almost 7% since late February, as the Fed failed to deliver more easing and amid concerns over the euro zone’s deepening debt crisis, which has fueled demand for the precious metal's hedge, the greenback.
Meanwhile, European Central Bank President Mario Draghi cancelled plans to attend the Fed’s annual summit in Jackson Hole due to a “heavy workload”.
The reports fuelled expectations that the ECB is working on policy measures to help stabilize the euro zone's sovereign debt markets, ahead of its next policy meeting on September 6.
The ECB president had been due to speak at the summit on Saturday, one day after a keenly anticipated speech by Fed Chairman Bernanke.
Elsewhere on the Comex, silver for December delivery dropped 0.9% to trade at USD30.86 a troy ounce, while copper for December delivery slumped 0.85% to trade at USD3.454 a pound.
