Gold steadies near seven-week low ahead of US data
Shafaq News
Gold inched up on Tuesday but hovered close to a more than seven-week low on concerns that the Federal Reserve may keep interest rates higher for longer, while investors awaited a slew of US economic data.
Spot gold rose 0.4% at $4,130.58 per ounce, as of 0407 GMT, after hitting its lowest level since August 5 in the previous session. US gold futures fell 0.2% to $4,162.20.
Geopolitical developments will "remain crucial for gold, as continued tensions could keep energy prices and yields elevated, while meaningful progress towards de-escalation could ease pressure," said Christopher Tahir, senior market strategist at Exness.
US and Iranian officials spoke separately with mediators as part of a renewed effort to end seven months of war, according to officials of both countries.
Oil prices rose for a second successive session amid lingering concern over Middle East supply disruption.
Elevated oil prices can fuel inflation by increasing costs across the economy, potentially prompting central banks to raise interest rates. Gold tends to struggle in a high-rate environment as investors favour assets that generate interest.
Markets currently see a 72.5% probability of a Fed rate hike in October, according to the CME's FedWatch Tool, compared with 57.6% a week ago.
Fed Governor Lisa Cook said she expects continued inflationary pressure in coming months stemming from AI-related demand and higher oil prices, though she stopped short of saying more rate hikes will be needed.
US consumer confidence and job openings data are due later in the day. The week will also see numbers on ADP employment, PCE and nonfarm payrolls.
"Persistent price pressures combined with resilient activity would reinforce expectations that central banks need to remain restrictive, keeping yields elevated and leaving gold vulnerable to further losses," Tahir added.
Among other metals, spot silver fell 0.9% to $60.42, platinum slipped 1.3% at $1,697.71 and palladium lost 0.8% to $1,205.27.
(REUTERS)
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