Gold prices were flat on Tuesday, as investors awaited comments from Federal Reserve Chair Jerome Powell and jobs data for further insight about the US central bank’s interest rate outlook.
Spot gold was steady at $2,331.41 per ounce, as of 0238 GMT.
US gold futures were up 0.1% to $2,341.80.
In order for prices to break above the current range, the market needs to see further weak data points that increase the possibility of a Fed rate cut in September, said Kelvin Wong, a senior market analyst for Asia Pacific at OANDA.
Traders will look for cues on rate cuts when Powell speaks later in the day.
Next on their radar are ADP employment, ISM services PMI data and minutes of the Fed’s last policy meeting due on Wednesday and the nonfarm payrolls report scheduled for release on Friday.
Data on Monday showed that US manufacturing contracted for a third straight month in June, while a drop in a measure of prices paid by factories for inputs to a six-month low suggested that inflation could continue to subside.
Gold prices decline in local market
While bullion is considered an inflation hedge, higher rates increase the opportunity cost of holding the non-yielding asset.
Analysts at Citi expect gold investment demand to rise to absorb almost all mine supply over the next 12-18 months but added that the main downside risk to its bullish base case forecasts is China retail demand being lower than anticipated owing to quotas on imports.
“Weaker central bank demand or a delay to the Fed normalizing interest rates are also risks to the strong investment demand thesis,” they said in a note.
Spot silver fell 0.2% to $29.38 per ounce, platinum was nearly unchanged at $977.00 and palladium edged up 1.2% to $983.09.
Comments
Comments are closed.