High interest rates discourage investors from putting their money into non-yielding assets such as gold
Gold rose slightly today, Tuesday, as it was confined to a narrow range, as investors refrained from forming large positions ahead of the release of US economic data that may affect the Federal Reserve (US Central Bank) strategy for interest rates.
The price of gold rose 0.1%, to 1842.37 dollars an ounce (an ounce) at 02:45 GMT, while it is trading in a range of four dollars. US gold futures rose 0.1%, also to $1,852.10.
High interest rates discourage investors from putting money into non-yielding assets such as gold, according to Archyde.com.
Gold prices hit their highest levels since April 2022 this month, but have since lost about $120 after a series of economic data showed signs of resilience in the US economy and labor market scarcity, raising fears that interest rates will remain high for a longer period.
The minutes of the Fed’s last policy meeting will be released tomorrow, Wednesday. Financial markets expect the bank to raise benchmark interest rates above 5% by May, and to a peak of 5.3% in July.
Investors are also awaiting core personal consumption expenditures in the US, which is the Federal Reserve’s preferred measure of inflation, and GDP figures due this week.
The dollar index rose 0.1%, making bullion priced in the greenback more expensive for buyers holding other currencies.
In terms of other precious metals, silver rose 0.1%, to $21.76 an ounce, platinum rose 0.2%, to $928.26, and palladium increased 0.2%, to $1507.90.