A weaker dollar helped gold prices rise on Tuesday as investors anticipated further information on the U.S. Federal Reserve’s policy towards rate hikes.
As of 0651 GMT, spot gold was up 0.7%, trading at $1,753.34 per ounce. To $1,752.60, U.S. gold futures increased by 0.7%.
Following hawkish remarks from U.S. Federal Reserve officials in the previous session, the price of gold decreased by around 1%. There is still a long way to go in the fight against inflation, according to Fed Presidents James Bullard and John Williams.
After the previous session, gold is seeing a corrective rally. Additionally, the dollar has decreased marginally,” noted Ilya Spivak, a currency expert for DailyFX.
Since the dollar index dipped 0.4%, foreign customers can now purchase gold at a reduced price. As the opportunity cost of owning the non-yielding asset increases, gold is similarly vulnerable to rising interest rates.
Now that Fed Chair Jerome Powell is scheduled to speak at a Brookings Institution event on Wednesday, investors’ attention will be entirely focused on him.
Gold will bounce, according to Spivak, if Powell’s speech strikes a tone that the market interprets as not moving the hawkish ball ahead.
This week also sees the release of the ADP National Employment Report and the U.S. Labor Department’s non-farm payroll figures. The data may offer additional hints about the Fed’s strategy.
In the meantime, Chinese police were present in large numbers in Beijing and Shanghai to stop further demonstrations against COVID curbs.
According to Michael Langford, director at corporate advice firm AirGuide, protests in China, the world’s largest buyer of gold, and the resulting high security presence will have an impact on spending and industrial activity over the course of the coming month, which will weigh on all metals.
Palladium increased by 1.5% to $1,872.88 while spot silver increased by 1.4% to $21.20 and platinum by 1.1% to $999.54.