Gold prices saw a modest increase on Tuesday, bolstered by a decline in Treasury yields, while investors awaited key U.S. economic data and Federal Reserve commentary to gauge the trajectory of interest rate adjustments.
At 0326 GMT, spot gold rose by 0.2% to $2,323.97 per ounce. U.S. gold futures also climbed by 0.4%, reaching $2,339.00.
The dip in benchmark 10-year Treasury yields contributed to gold’s appeal, as it reduced the opportunity cost of holding the precious metal, while the dollar maintained stability.
City Index senior analyst Matt Simpson noted the market’s indecisiveness in recent days, stating, “The fact that gold’s direction has alternated over the past four days without really going anywhere of significance tells me the market is waiting for something to wake it from its lull.” Simpson suggested that a potential breakthrough for gold could hinge on the outcome of U.S. retail sales, speculating a possible breach of the $2,350 mark if sales figures disappoint.
Investor attention is focused on upcoming economic indicators, including U.S. retail sales data scheduled for release at 1230 GMT, followed by weekly jobless claims on Thursday and flash purchasing managers’ indexes on Friday. Recent reports have signaled a moderation in both labor market conditions and inflationary pressures.
Philadelphia Fed President Patrick Harker’s remarks on Monday indicated a predisposition towards a single rate cut, contingent on forthcoming economic data. A roster of Federal Reserve officials, including Chicago Fed’s Austan Goolsbee and Richmond Fed’s Thomas Barkin, are slated to deliver speeches later in the day, further influencing market sentiment.
According to the CME Group’s FedWatch Tool, traders are pricing in a 76% probability of an interest rate reduction in November. Lower interest rates diminish the comparative cost of holding non-yielding assets like gold.
In the broader metals market, spot silver remained stable at $29.49 per ounce, while platinum advanced 1.2% to $976.15 and palladium gained 0.7% to $894.64 per ounce.
This movement underscores the market’s keen anticipation of forthcoming economic data and Federal Reserve communications, which are expected to provide clearer signals on the future direction of monetary policy and its impact on precious metals.
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