Gold prices edged lower on Tuesday, pressured by a stronger dollar, while market participants awaited minutes of the Federal Reserve’s last meeting and economic data for further cues on US interest rate path. Spot gold was down 0.2% to $2,639.45 per ounce, as of 0303 GMT.
US gold futures lost 0.3% to $2,658.70.
The dollar index hovered near a seven-week high, making bullion more expensive for holders of other currencies, while the benchmark US Treasury 10-year yield topped 4% for the first time in more than two months.
Gold has lost some momentum due to rising dollar and bond yields, but downside risks may be limited by global conflicts that favour safe-haven assets, said Tim Waterer, chief market analyst at KCM Trade.
Hezbollah fired rockets at Israel’s third-largest city, Haifa, while Israel appeared ready to expand its offensive into Lebanon, marking one year since the devastating Hamas attack that ignited the Gaza war.
Bullion is considered a safe investment during times of political uncertainty.
Investors are focused on the minutes of the Fed’s latest policy meeting, due on Wednesday, followed by the US Consumer Price Index on Thursday and the Producer Price Index data on Friday.
Several Fed officials are also lined up to speak throughout the week.
“Looking ahead, if we see any upside surprises in the US CPI numbers this week, this could boost further boost the dollar and pressure gold,” Waterer added.
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Last week’s stronger-than-expected jobs report prompted markets to scale back their expectations for US rate cuts. According to the CME FedWatch tool, markets are no longer pricing in a 50 basis points reduction at the Fed’s November meeting, and see an 87% chance for a 25 bps cut.
Meanwhile, St. Louis Fed President Alberto Musalem expressed support for more interest rate cuts, emphasizing that the economy’s performance will guide policy.
Spot silver lost 1.2% to $31.34 per ounce. Platinum was down 0.6% to $965.57 and palladium fell 2.3% to $1,000.25.
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