Fed chair Powell talks down gold, reiterates optimistic outlook on U.S. growth
(Kitco News) - The gold market is giving up its daily gains as Federal Reserve Chairman Jerome Powell provides little guidance on U.S. monetary policy ahead of the central bank’s meeting in less than two weeks.
Powell struck a relatively optimistic tone in his comments at an event in hosted by the Swiss Institute of International Studies, in Zurich Switzerland.
He reiterated his stance that the U.S. economy will continue to grow even as it faces global headwinds. The comments have weighed on the gold market. December gold last traded at $1,528 an ounce, relatively flat on the day.
Although business investment has weakened because of global trade uncertainty, Powell said that the central bank is not forecasting a recession.
“The labor market is still tightening at the margins and the consumer is in good shape. There will be no recession but there are risks that we are monitoring,” he said.
Powell’s positive statement on the labor market comes after data showed that the U.S. economy created 130,000 jobs. Although economists have described the latest nonfarm payrolls report as decent it missed consensus forecast estimates.
According to the CME FedWatch Tool markets are still pricing in a rate cut Sept. 18 following the central bank’s monetary policy meeting. Many analysts have noted that economic data continues to support looser monetary policy, which will ultimately benefit the gold market.