Gold prices fell on Thursday, pushing the most active gold futures contract to a nine-month low, as the dollar gained in strength and the yield on long-term U.S. Treasury Notes rose.
The Federal Reserve Chairman Jerome Powell commented at a Wall Street Journal Webinar this afternoon that the movements in the bond market was a concern, but then it has not made a significant impact on financial conditions. His comments lifted the dollar.
The dollar index, which moved in a tight band, albeit above the flat line, till around noon, rose sharply over the next couple of hours. The index rose to 91.66, gaining over 0.8%.
Meanwhile, the yield on 10-year U.S. Treasury Note moved past 1.5%.
Gold futures for April ended down $15.10 or about 0.9% at 1,700.70 an oune, about $9.00 off the day’s low. Today’s close was the most active gold contract’s lowest close in nine months.
Silver futures for May ended down $0.926 at $25.461 an ounce, while Copper futures for May settled at $3.9785 per pound, down $0.1635 from previous close.
Powell, who acknowledged the reopening of the economy could “create some upward pressure on prices,” suggested the increase in the annual rate of inflation would largely reflect comparisons to the low prices seen a year ago.
Powell said the recent spike in bond yields has “caught my attention” and would be “concerned by disorderly conditions in markets or persistent tightening in financial conditions that threatens the achievement of our goals.”
Data released by the Labor Department this morning showed initial jobless claims inched up to 745,000 in the week ended February 27th, an increase of 9,000 from the previous week’s revised level of 736,000. Economists had expected jobless claims to rise to 750,000 from the 730,000 originally reported for the previous week.
A separate report released by the Commerce Department showed a bigger than expected increase in new orders for U.S. manufactured goods in the month of January.