Gold prices ticked higher on Tuesday after the dollar retreated as cautious investors awaited further US economic data due this week to gauge the Federal Reserve’s next policy move.
Spot gold rose 0.3% to $1,994.90 per ounce by 0311 GMT, and US gold futures also gained 0.3% to $2,005.00.
The dollar index dipped, making greenback-priced gold more attractive for buyers holding other currencies.
Gold is getting a boost from a weaker dollar, and focus will remain on the next set of US economic data and the Fed meeting to understand the central bank’s stand on rate hikes for the rest of the year, said Ajay Kedia, director at Kedia Commodities in Mumbai.
Until then, prices are likely to consolidate in the $1,970 to $2,020 range, Kedia said, adding that overall scenario still remains supportive for bullion.
Dallas Fed’s report on Monday showed manufacturing activity in Texas contracted in April, highlighting the economic toll of the Fed’s rate tightening cycle.
Markets are pricing in an 87.2% chance of a 25-basis-point hike by the Fed at its May 2-3 meeting. Rate hikes tend to weigh on non-yielding gold, even when it is considered an inflation hedge.
Meanwhile, rising concerns that the US Treasury Department could hit its debt limit in the coming months are leading investors to shun certain Treasury bills and pour into others as they seek out low-risk places to park cash.
Gold lacks momentum as spotlight remains on Fed outlook
Investors now await US consumer confidence report scheduled later in the day, along with a key Fed-favoured inflation gauge, the core personal consumption expenditures index, and US GDP quarterly growth rate, due this week.
Among other precious metals, silver fell 0.1% to $25.14 per ounce and palladium was down 0.2% at $1,532.24. Platinum rose 0.3% to $1,084.78 after falling more than 3% in the previous session.
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