* Silver falls over 3%
* Interactive graphic tracking global spread of coronavirus: open tmsnrt.rs/3aIRuz7 in an external browser (Adds comments and updates prices)
Aug 27 (Reuters) - Gold slumped over 2% on Thursday as U.S. Treasury yields rose after Federal Reserve Chair Jerome Powell laid out an aggressive new strategy to reach the bank’s 2% inflation target.
Spot gold fell 1.1% to $1,931.96 per ounce by 02:49 pm EDT (1849 GMT). Prices had risen as much as 1.1% during Powell’s speech.
U.S. gold futures settled down 1% at 1,932.60.
“The Fed had a chance to update their forward guidance and signal that the labour market may warrant more support but we really didn’t get that,” Edward Moya, senior market analyst at broker OANDA said.
“We’re probably going to see the stimulus trade unwind a little bit here and while this has really prompted a strong move with the Treasury curve and the dollar, this provides us with a frustrating consolidation (in gold).”
Longer-term U.S. Treasury yields moved to their highest levels in months after Powell’s remarks.
In a widely expected move, the Fed said it will seek to achieve inflation averaging 2% over time, offsetting below-2% periods with higher inflation “for some time” and rolled out an aggressive new strategy to lift employment.
The Fed made no explicit promises on how long it may keep rates low, or how high it would allow inflation to go.
The Fed had pumped in massive stimulus and kept interest rates near zero to lift the U.S. economy from the impact of the coronavirus.
“We expect support for gold prices to remain firm, as Powell’s comments clearly reflect that the economic recovery from the COVID-19 crisis will be long and gradual, with ample central-bank support necessary to avoid backsliding,” said Cailin Birch, global economist at The Economist Intelligence Unit.
Elsewhere, silver was down 1.8% at $27.01, having fallen over 3% earlier.
Palladium declined 1.2% to $2,171.70 and platinum fell 0.9% to $920.41. (Reporting by K. Sathya Narayanan in Bengaluru; Editing by Steve Orlofsky and Cynthia Osterman)
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