Gold prices drifted higher on Tuesday, snapping a four-day losing streak, as investors awaited U.S. economic data later this week for more insights on the Federal Reserve’s interest rate-cut plans.
Spot gold was up 0.3% at $2,405.13 per ounce at 1230 GMT, after hitting a record high of $2,483.60 last week. U.S. gold futures gained 0.5% to $2,407.00.
“Spot gold prices should remain supported by persistent expectations (of) the Fed’s eventual policy pivot. Further U.S. political instability could also add to the safe haven bids for the precious metal,” said Han Tan, chief market analyst at Exinity Group.
Investors are looking to a U.S. report on gross domestic product for the second quarter on Thursday and personal consumption expenditures data for June on Friday for clues on the Fed’s interest rate cut path.
“Should the incoming GDP and PCE data paint a “goldilocks” scenario for the U.S. economy, which allows the Fed to move interest rates lower, that should help keep gold above $2400,” Tan said.
The Federal Reserve is scheduled to hold its next policy meeting at the end of July. Markets are anticipating a 94% chance of a rate cut by the central bank in September, according to the CME FedWatch Tool.
On the political front, U.S. Vice President Kamala Harris, who became the presumed Democratic nominee after President Joe Biden withdrew from his reelection campaign on Sunday, will campaign in the state of Wisconsin.
“While there is a lack of a clear pre-election commodities trade given the range of scenarios that could play out, gold stands out as a winner,” thanks to drivers like the growing concern on complacency over the rise in fiscal debt, tariffs, and trade retaliations, JP Morgan said in a note on Monday.
Meanwhile, India slashed import tax on gold and silver to 6%, the government announced in its annual budget.
Spot silver fell 0.8% to $28.98, platinum was up 0.5% at $952.05 and palladium gained 0.9% to $916.13.
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