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Donald Trump has described the Inflation Reduction Act (IRA) as a "green scam" and vowed to repeal it after he returns to the White House in January.
Gold is en route to snap a four-session streak of gains on Friday after US Federal Reserve Chair Jerome Powell left the door open to more interest rate hikes in his latest comments.
Spot gold was down 0.4% to $1,910.57 per ounce by 1:15 p.m. EDT, but remains on pace for a moderate gain for the week. US gold futures also fell 0.4% to $1,938.30 an ounce.
[Click here for an interactive chart of gold prices]
However, both the dollar and benchmark 10-year Treasury yields are also set to post a weekly gain, capping gold’s gains for the period.
This pressured gold as Powell looks to stay the course in holding rates higher for longer, remaining data-dependent, said Phillip Streible, chief market strategist at Blue Line Futures in Chicago, in a Reuters note.
Powell, in a speech at an economic summit in Jackson Hole, Wyoming, said policymakers would “proceed carefully as we decide whether to tighten further,” but also made clear the central bank has not yet concluded that its benchmark interest rate is high enough to be sure inflation returns to the 2% target.
“Gold’s reaction to Powell’s signal that the Fed is on hold but vigilant is somewhat disappointing, suggesting demand at current levels may be limited,” said Tai Wong, a New York-based independent metals trader.
“We are likely in a trading range, though a close under $1,900 could trigger some liquidation.”
Momentum was also building among European Central Bank policymakers for a pause in rate hikes amid deteriorating growth prospects. ECB chief Christine Lagarde was also due to speak at Jackson Hole later in the day.
“If she (Lagarde) could lift the euro currency up, you might see some dollar weakness and that could boost gold,” Streible said.
(With files from Reuters)
