NEW YORK: Gold prices edged back up in a choppy session on Wednesday tracking a pullback in the dollar, while investors looked forward to more economic data to gauge the US Federal Reserve’s rate-hike strategy.
Spot gold was up 0.1% at $1,876.41 per ounce by 12:27 p.m. ET (1727 GMT). US gold futures rose 0.5% to $1,875.40.
The dollar edged 0.1% lower against its rivals, making gold less expensive for other currency holders.
“The main focal point here has been the shift in sentiment after the jobs report. There were high expectations that (Fed Chair) Jerome Powell would take advantage of the opportunity to jawbone the market down a bit, but he did not,” said David Meger, director of metals trading at High Ridge Futures.
“We continue to see gold prices to be range bound here. There is some fairly strong support in the $1,850 to $1,870 range. We think dips are going to remain a buying opportunity in the short term.” Powell said on Tuesday interest rates might need to move higher than expected if the US economy remained strong, but reiterated he felt a process of “disinflation” is underway.
New York Fed President John Williams said on Wednesday his expectations of future central bank rate cuts were driven mostly by a need to respond to the likelihood of lower levels of inflation in the future.
Gold is highly sensitive to rising US interest rates, as these increase the opportunity cost of holding non-yielding bullion.
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