Prices for gold fell on Friday, snapping a week-long streak of gains, as a result of conflicting signals from U.S. Federal Reserve officials on the timing of a possible rate hike, although prices were still on track to end the week higher.
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Fischer was speaking as his boss, Janet Yellen, prepares to give a closely watched speech at the Jackson Hole gathering of global central bankers Friday.
“The DXY US dollar index already seemed to be looking ahead for some slightly more upbeat language on the USA economy coming out this week as it rallied 0.4 percent on Friday”, he said.
On Sunday, Fed Vice Chairman Stanley Fischer gave a generally upbeat assessment of the US economy’s current strength in prepared remarks, saying the job market was close to full strength and still improving.
“It’s started in Europe and it’s gathering some momentum in the US”, said David Keeble, global head of interest rates strategy at Credit Agricole Corporate and Investment Bank in NY.
Markets have put the chances of an interest rate rise at some point this year at just over 50 per cent, but Yellen and her Fed colleagues have been keen to stress they believe markets are underestimating the central banks’ willingness to act.
The dollar pulled up to 100.20 yen and $1.3080 against the pound, and pushed to $1.1324 against the euro. Wall Street logged modest losses on Friday, ending almost flat for the week.
He added that investors will likely be relieved if the dollar stays between 100-105 yen.
Japan’s Nikkei rose 0.3 percent, taking solace from a weaker currency ahead of the Jackson Hole meeting.
Crude oil futures dropped, giving back some of their recent gains that propelled oil into bull market territory, after technicals had it in a bear market early this month.
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Spot gold fell as much as 1.5% to a session low of $1,337.37 US per ounce, paring losses to trade down 0.6% at $1,344.41.
