Gold prices rose on Tuesday after two sessions of losses as the dollar eased, while investors sought more clarity on the US Federal Reserve’s monetary policy stance. Spot gold was up 0.2% at $2,001.09 per ounce, as of 0457 GMT.
US gold futures rose 0.2% to $2,011.10. “Given the sharp moves of late and little tier-1 economic data to guide this week, we should expect gold to consolidate in the $1,980-$2,020 range,” said OCBC FX strategist Christopher Wong.
The US dollar index was 0.1% lower and made bullion cheaper for overseas buyers. Gold prices fell to around a two-week low on Monday after data showed manufacturing activity in New York state increased for the first time in five months, and confidence among US single-family homebuilders improved for a fourth straight month in April.
The data added to bets of an interest rate hike by the Fed at its May meeting. The CME FedWatch tool shows that markets are pricing in a 86.7% chance of a 25 basis point hike in May.
Gold is considered a hedge against inflation and economic uncertainties, but higher interest rates dim the non-yielding bullion’s appeal.
The focus will now be on comments from Fed officials this week before they enter a blackout period from April 22, ahead of the central bank’s May 2-3 meeting.
“There is too much earnings, political, geopolitical and central bank risk on the table,” Edward Moya, senior market analyst at OANDA, said in a note, adding that only a couple of risks need to rattle markets to trigger safe haven flows towards gold with the metal’s path towards record territory still present.
Gold hovers above $2,000, focus on Fed outlook
Meanwhile, top bullion consumer China’s economic recovery gathered pace in the first quarter as the country’s gross domestic product grew 4.5% year-on-year, beating expectations.
Spot silver dipped 0.4% to $25.02 per ounce, platinum eased 0.1% to $1,046.55 and palladium fell 0.2% to $1,562.26. Reuters
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