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Gold futures failed to hold early gains and settled notably lower on Thursday.
Gold prices surged higher earlier in the session amid an escalation in tensions between the U.S. and China. Traders also reacted to data on unemployment claims, GDP, and pending home sales, in addition to Federal Reserve Chairman Jerome Powell's speech at the virtual Jackson Hole Symposium.
The dollar index, which dropped to 92.42, rose to 93.32 by late morning but retreated to 92.98 later, netting a small loss.
Gold futures for December ended down $19.90 or about 1% at $1,932.60 an ounce, well off the session's high of $1,987.00.
Silver futures for September ended down $0.42 or about 1.5% at $27.025 an ounce, while Copper futures for September settled at $2.9905 per pound, up by about 0.3% from previous close.
Federal Reserve Chair Jerome Powell today announced a widely expected shift with regard to the price-stability side of the central bank's dual mandate.
During a live-streamed speech to the Jackson Hole economic symposium, Powell said that the Fed will change its approach to a "flexible form of average inflation targeting."
The Fed chief stressed that the longer-run goal continues to be an inflation rate of 2% but noted inflation will average less than that if it runs below 2% following economic downturns and never moves above that level even when the economy is strong.
Powell said appropriate monetary policy will therefore likely aim to achieve inflation moderately above 2% following periods when inflation has been running below that level.
In economic releases, pending home sales in the U.S. jumped by much more than expected in the month of July, the National Association of Realtors revealed in a report on Thursday.
NAR said its pending home sales index spiked by 5.9% to 122.1 in July after soaring by 15.8% to 115.3 in June. Economists had expected pending home sales to surge up by 3%.
Pending home sales increased for the third straight month after plummeting in March and April and are now up by 15.5% compared to the same month a year ago.
the Labor Department released a report showing a pullback in first-time claims for U.S. unemployment benefits in the week ended August 22nd.
The report said initial jobless claims dropped to 1.006 million, a decrease of 98,000 from the previous week's revised level of 1.104 million.
Economists had expected jobless claims to decline to 1.000 million from the 1.106 million originally reported for the previous week.
A report released by the Commerce Department showed economic activity in the U.S. contracted slightly less than initially estimated in the second quarter, although it still showed a sharp drop in gross domestic product.
The report said real gross domestic product plummeted by 31.7% in the second quarter compared to the previously reported 32.9% nosedive. Economists had expected the plunge in GDP to be revised to 32.5%.
The smaller than previously estimated drop in GDP came as private inventory investment and consumer spending decreased less than previously estimated.
