Gold price (Yellow Metal) rose on Tuesday as the dollar retreated ahead of key economic data from China and the United States due this week, while traders also awaited Federal Reserve Chair Jerome Powell’s speech to assess how rate hikes would pan out.
- Dollar edges down 0.1%
- Benchmark U.S. yields near session-highs
- Silver, platinum, palladium up 1% each
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Spot gold (XAU/USD) was up 0.2% at $1,925.80 per ounce, as of 0626 GMT. U.S. gold futures were up 0.1% at $1,935.60.
“If the dollar falls, but yields edge up (softer Fed tone, neutral/upbeat data), gold may stumble but remain muted as silver, platinum and palladium rise,” said Ilya Spivak, head of global macro at Tastylive.
“Looking ahead, (gold) will continue to try reconciling signs of a deepening slowdown in global economic activity with this hawkish central bank turn.”
The dollar index (DXY) edged down 0.1%, making greenback-priced bullion more attractive for overseas buyers.
Benchmark U.S. yields (US10Y) were near session-highs, rising from a near three-week low in the previous session.
Economic data including China’s Purchasing Managers’ Index, and a key U.S. inflation gauge this week could provide a clearer picture on the macroeconomic situation.
Powell will be speaking at the policy panel before the European Central Bank Forum in Sintra on banking at 1330 GMT on Wednesday.
With the core personal consumption expenditure reading forecasted to be unchanged at 4.7%, risk appetite could suffer if such an outcome would lead to more rate hikes, Spivak highlighted.
Investors now expect a 77% chance of a rate hike in July, with rate cuts seen from 2024 onwards.
High interest rates discourage investing in non-yielding gold, which is a safe investment during economic uncertainties.
China’s economic growth in the second quarter will be higher than the first and is expected to reach the annual economic growth target of around 5%, China’s Premier Li Qiang told delegates at the World Economic Forum in Tianjin.
Spot silver (XAG/USD) gained 1% to $23 per ounce, platinum also jumped around 1% to $933.
