Gold prices fell to a more-than three-week low on Thursday, extending a rash of recent losses after several Federal Reserve officials warned against bets that the central bank was done raising interest rates.

The yellow metal was headed for a fourth straight day in red, amid continued pressure from a rebound in the dollar and Treasury yields. Waning safe haven demand for gold also dented prices, as markets priced in a much lower risk premium from the Israel-Hamas war.

Spot gold fell 0.1% to $1,949.38 an ounce, while gold futures expiring in December fell 0.2% to $1,954.30 an ounce by 23:41 ET (04:41 GMT). Both instruments were trading down over 2% each this week. 

Fed uncertainty persists, Powell speech awaited 

A string of Fed officials warned this week that U.S. interest rates will remain higher for longer, and that markets should be wary of betting on any early rate cuts. Sticky inflation and resilience in the U.S. economy could also attract more rate hikes this year. 

Their comments somewhat offset recent bets that the Fed’s rate hike cycle was over, and saw traders pivot back into rate-exposed assets such as the dollar and Treasuries.

Adding to the uncertainty, Fed Chair Jerome Powell offered little cues on monetary policy during an address on Wednesday. But the Chair is now set to speak at a separate event later on Thursday.

While markets have interpreted his comments as less hawkish, Powell has largely maintained his rhetoric that U.S. rates will remain higher for longer, and that more work was needed to bring down inflation.

Such a scenario bodes poorly for gold, given that higher interest rates push up the opportunity cost of investing in bullion, which offers no yields.

This notion has limited any major gains in gold this year, keeping the yellow metal well below the coveted $2,000 an ounce level. But gold is still trading up about 8% so far in 2023. 

Copper hit by China disinflation shock 

Among industrial metals, copper prices retreated on Thursday, extending recent losses following more signs of economic weakness in top importer China. 

Copper futures fell 0.3% to $3.6258 a pound. 

Chinese government data showed that both consumer and producer inflation shrank in October, putting the country in disinflation for the second time this year. The readings came after several other negative indicators for October, including disappointing trade data and a decline in manufacturing activity. 

Signs of persistent economic weakness in the world’s largest copper importer pushed up concerns over slowing demand for the red metal- which has been a recurring trend this year.

But while Chinese copper demand has remained relatively stable, demand in other parts of the world has slowed substantially, amid worsening economic conditions.