2020.08.2711:11:00UTC+00Gold Edges Lower Before Powell's Speech

Gold prices fell on Thursday as traders waited for Fed Chairman Jerome Powell's speech at the annual central bankers' conference later in the day for clues about whether a shift to easier policy is possible in coming months.

Spot gold dropped 0.7 percent to $1,939.70 per ounce, while U.S. gold futures were down 0.3 percent at $1,946.90.

Analysts expect that Powell will outline dovish measures including a move toward average inflation targeting in which inflation above the central bank's usual 2 percent target would be tolerated and even desired.

Also in focus is the Republican National Convention. U.S. President Donald Trump will make a crucial pitch for a second term in the White House with a keynote address highlighting his record in office.

Gold appears to be taking a breather after overnight data showed U.S. durable goods orders surged 11.2 percent in July, compared with expectations of an increase of 4.3 percent and a 7.6 percent increase in June.

Downside remains limited as U.S.-China tensions over the South China Sea escalated.

While the United States blacklisted 24 Chinese firms and targeted individuals it said were part of construction and military actions in the South China Sea, Beijing fired four missiles into the world's most hotly contested body of water, further ratcheting up tensions between the two countries.