Gold prices rose on Tuesday on a weaker dollar ahead of key of economic data from China and the United States due in the week, as well as U.S. Federal Reserve Chair Jerome Powell’s upcoming speech, to assess how rate hikes would pan out.
Spot gold rose 0.3% to $1,928.14 per ounce by 0402 GMT while U.S. gold futures were up 0.2% to $1,937.70.
“If the dollar falls but yields edge up (softer Fed tone, neutral/upbeat data), gold may stumble but remain muted as silver, platinum and palladium rise,” said Ilya Spivak, head of global macro at Tastylive.
“Looking ahead, (gold) will continue to try reconciling signs of a deepening slowdown in global economic activity with this hawkish central bank turn.”
The dollar index edged down 0.1%, making greenback-priced bullion more attractive for overseas buyers.
Benchmark U.S. yields were at session-highs, rising from a near three-week low in the previous session.
Economic data including China’s Purchasing Managers’ Index, and a key U.S. inflation gauge this week could provide a clearer picture on the macroeconomic situation.
Fed Chair Jerome Powell would be speaking at the policy panel before the European Central Bank Forum in Sintra on banking at 1330 GMT on Wednesday.
“Worryingly, the core personal consumption expenditure reading ... is seen holding unchanged at 4.7%. Market-wide risk appetite seems likely to suffer if the traders see such an outcome as beckoning more hikes this year,” Spivak highlighted.
Investors now expect a 74% chance of a rate hike in July, with rate cuts seen from 2024 onwards.
High interest rates discourage investing in non-yielding gold, which is a safe investment during economic uncertainties.
Additionally, in top-gold consumer China, investors will be eyeing industrial profits for May on Wednesday along with manufacturing and non-manufacturing purchasing managers’ index for June on Friday, which could provide hints for further stimulus measures to bolster economic recovery.
Spot silver rose 0.6% to $22.89 per ounce, platinum was up 0.8% to $931.15, while palladium jumped 1% to $1,318.99.