BENGALURU: Gold prices slipped on Tuesday after rising nearly 2% in the previous session as investors cautiously turned back to riskier assets and looked forward to further cues on the US central bank’s policy stance.
Spot gold was down 0.3% at 1,856.39 per ounce as of 10:58 a.m. EDT (1458 GMT) after rising to a more than one week high earlier in the session.
US gold futures climbed 0.2% to $1,867.10 an ounce. Spot gold rose 1.6% on Monday, its biggest one-day jump in five months, as military clashes between Israel and Palestinian group Hamas boosted demand for safe-haven investments.
Profit-taking and increased investor appetite for risk pressured prices, although the conflict between Israel and Hamas limited gold’s losses, said Bart Melek, head of commodity strategies at TD Securities. Gold is often a safe haven for investors during times of global instability.
Wall Street’s main indexes opened higher, though caution prevailed amid escalating tensions in the Middle East. Markets focused on the Federal Reserve’s September monetary policy meeting to be published on Wednesday and US Consumer Prices Index (CPI) data due on Thursday.
“If the CPI report comes hotter than expected, especially the core number, it will be negative for gold as it will indicate that the Fed will have to keep rates higher for longer, Melek added. As bullion yields no interest, it tends to lose its attraction when interest rates rise.
Top ranking Fed officials indicated on Monday that rising yields on long-term US Treasury bonds could steer the Fed away from further increases in its short-term policy rate. Spot silver fell 0.6% to $21.77 per ounce, platinum rose 0.1% to $887.44 and palladium gained 1% to $1,151.49.
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