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Gold price hears Powell's hawkish comments loud and clear, drops $30, falling below $1,800

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(Kitco News) - Federal Reserve Chair Jerome Powell has thrown a bucket of cold water on gold's Friday rally as prices fall back below $1,800 an ounce.

After a relatively quiet week, rising inflation pressures helped push gold prices to a six-week high. Many analysts were looking for the precious metal to end the week above $1,800 for the first time since early September.

However, comments from Powell have dashed those bullish hopes. In an online conference hosted by the South African Reserve Bank, despite significant sound issues, Powell reiterated his outlook that the U.S. central bank is on track to reduce its monthly bond purchase before the end of the year. He added that the monthly purchases are expected to end by mid-2022.

The gold market heard Powell's comments and dropped roughly $30 from its session highs. December gold futures last traded at $1,786.30 an ounce, up 0.24% on the day.

Powell said that there are risks that the global supply crunch could keep inflation elevated through 2022; however, he added that the central bank's base case is for the supply bottlenecks will be resolved and inflation will fall back to 2%.

Powell also added that despite the uncertainty, the labor market is on track to reach maximum employment next year.

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