Key points
Gold prices experienced a slight uptick on Tuesday, reflecting cautious optimism among investors as they await critical economic updates. Spot gold rose by 0.2%, reaching $2,364.03 per ounce as of 0112 GMT.
This increase comes after a more than 1% decline on Monday, highlighting the market’s sensitivity to upcoming Federal Reserve actions.
See: Gold trading at 2361.91 on the VT Markets app.
Spot gold prices moved up 0.2% to $2,364.03 per ounce, while U.S. gold futures firmed by 0.3%, standing at $2,369.70. This movement indicates a cautious but positive outlook among investors ahead of Federal Reserve Chair Jerome Powell’s testimony.
Investors are keenly awaiting Powell’s testimony before the Senate and the House, scheduled for later in the day and Wednesday, respectively. His comments could provide clearer insights into the Fed’s potential interest rate direction. Lower interest rates typically enhance the appeal of holding non-yielding bullion like gold.
Also read: Gold rises as dollar weakens; attention turns to U.S. Fed minutes
The path of U.S. inflation appears to be softening, as indicated by a Fed Bank of New York report. This report, released on Monday, noted a retreat in projections for price increases across a broad spectrum of consumer goods and services.
The upcoming release of June’s consumer (CPI) and producer (PPI) price indexes on Thursday and Friday, respectively, will further inform market expectations.
Recent labour market data showed the U.S. unemployment rate climbing to 4.1%, suggesting a cooling in the labour market. This data led to a more than 1% increase in bullion prices on Friday. In parallel, spot silver rose by 0.4% to $30.90, platinum edged higher by 1% to $1,006.20, and palladium gained 0.6% to $1,015.48.
Investors will closely watch Powell’s testimony and the forthcoming inflation data. Any signals of a dovish stance from the Fed could further boost gold prices, while stronger-than-expected inflation data could temper gains.
In summary, the market is navigating a period of heightened sensitivity to economic data and central bank signals, with gold and other precious metals poised to respond accordingly.
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