Gold prices rose to a seven-week high on Tuesday, after US economic data showed lukewarm inflation and nearly flat consumer spending, raising the question of whether the Federal Reserve will raise interest rates in the coming months. Spot gold rose 0.3 percent to $1,273.26 an ounce by 1:49 p.m. EDT (1749 GMT), after rising to $1,273.97, the highest since June 14. It rose 2.2 percent last month, its biggest monthly gain since February.
US gold futures for August settled up 0.5 percent at $1,279.40. "The continuation of weakness in the data is having people question the Fed and if inflation will be able to pick up longer term, and that's what's really driving (gold)," said Ryan McKay, associate commodities strategist for TD Securities.
"People are starting to question (a US rate hike) more and we've seen a rebound from the lows of $1,200, and I think that's due to people becoming less certain that this is going to happen." The dollar edged higher as investors consolidated positions, after the falling to a 15-month low on US political uncertainty and lackluster data, which kept the Federal Reserve's policy outlook uncertain.
In other precious metals, silver fell 0.2 percent to $16.75 per ounce. Palladium gained 1 percent to $891.90 per ounce, after it hit a near seven-week high of $900. It rose almost 5 percent in July. Platinum climbed 1.2 percent to $947.10 per ounce, after rising to $947.60, a high since June 14. It closed July higher, its first monthly gain since February.
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