Gold holds near seven-week low, US economic data on tap
LONDON: Gold steadied on Tuesday but hovered near 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.
Gold prices remained stagnant near a seven-week low on Tuesday as investors awaited key US economic data and pondered the possibility of the Federal Reserve maintaining higher interest rates for an extended period. The spot price of gold remained steady at US$4,123.29 per ounce, with US gold futures slipping 0.3% to US$4,155.50.
Oil prices climbed for a second day due to lingering concerns over Middle East supply disruptions, which could lead to higher inflation and potentially spur central banks to increase interest rates to curb price pressures. Despite being considered an inflation hedge, gold typically underperforms in a high-rate environment as investors lean towards assets that generate yield.
Recent diplomatic efforts saw US and Iranian officials communicating with mediators to attempt resolving a seven-month-long war. Currently, markets estimate a 70.3% chance of a Federal Reserve rate hike in October, as per the CME FedWatch Tool. Fed Governor Lisa Cook expressed concerns over ongoing inflationary pressure stemming from artificial intelligence-related demand and higher oil prices, without stating that additional rate hikes would be necessary.
Expectations are high for a deluge of US economic data this week, including job openings, ADP employment, PCE figures, and nonfarm payrolls, providing fresh insights into potential monetary policy shifts. Additionally, the London Bullion Market Association faces a legal challenge in the High Court, arguing they owed a duty of care to two Tanzanian artisanal miners who allegedly died at the North Mara gold mine in 2019.
Among other precious metals, spot silver declined 0.3% to US$60.76, platinum remained stable at US$1,717.70, and palladium stayed flat at US$1,214.75.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
