Last updated: July 05, 2023, 02:13 AM IST
New York, United States of America (USA)
Past flare-ups also benefited the US dollar, reducing demand for gold.
Spot gold was up 0.4% to $1,928.09 an ounce at 9:31 a.m. EDT (1331 GMT), with trading volumes likely thinned by a U.S. holiday
Gold prices rallied slightly higher on Tuesday as some traders bet that recent weak economic data in the US may prompt the Federal Reserve to rethink its rate hike trajectory pending further guidance from the minutes of the central bank’s latest meeting.
Spot gold was up 0.4% to $1,928.09 an ounce at 9:31 a.m. EDT (1331 GMT), with trading volumes likely deflated by a US holiday.
US gold futures rose 0.3% to $1,935.90.
“Weaker-than-expected US economic data released Monday, including PMIs, supported gold. Market participants will closely monitor upcoming U.S. job market data and see if previous U.S. rate hikes will slow the U.S. economy,” said UBS analyst Giovanni Staunovo.
But the minutes of Wednesday’s Fed meeting could “sound hawkish in line with Jerome Powell’s recent testimony,” Staunovo added.
Investors see an almost 86% chance of a 25 basis point increase in July, according to CME’s Fedwatch tool. High rates discourage investments in zero yield gold.
The focus this week will also be on nonfarm payrolls after US manufacturing collapsed in June.
“Currently, the headwinds for gold expect further tightening of 50 basis points, more liquidity withdrawals and interest rates to remain relatively high for some time to come,” said Nicholas Frappell, Global Head of Institution Markets at ABC Refinery.
Also on the radar were new developments in the US-China trade war, with Beijing restricting exports of some metals used in semiconductors, electric vehicles and high-tech industries.
Past flare-ups also benefited the US dollar, reducing demand for gold. [USD/]
Spot silver was up 0.6% to $23.02 an ounce and palladium was up 0.8% to $1,238.92. Platinum was up 1.4% to $919.06 and was on course for a third straight winning session.
“The white metals remain tied to the performance of gold. That said, concerns about economic growth have a bigger impact as those metals have a higher industrial use than gold,” Staunovo said.
(This story has not been edited by News18 staff and was published from a syndicated news agency feed – Reuters)
