© Archyde.com. Gold bars at a facility in West Point, New York, USA. Photo from Archyde.com archive.
(Archyde.com) – It rose on Tuesday as the dollar fell as investors awaited US inflation data that might determine the next steps for the Federal Reserve’s monetary policy.
And it increased in spot trading 0.5 percent to $ 1861.93 an ounce by 0645 GMT, following falling to its lowest level since early January in the previous session. US gold futures rose 0.4 percent to $1,870.60.
Gold is highly sensitive to rising interest rates because that increases the opportunity cost of holding that non-yielding asset.
“If the declining inflation trend in the US shows signs of slowing (even if temporarily), caution regarding monetary tightening by the Federal Reserve might negatively affect risk sentiment,” said Christopher Wong, strategist at OCBCFX. and gold, while the dollar is likely to find further support.”
Investors are eagerly awaiting US consumer price data for January, due later in the day. Economists polled by Archyde.com had expected the core consumer price index to rise 0.5 month on month.
Wong added that if the consumer price index came out lower than expected, the Federal Reserve may bear the slowdown in raising interest rates, “which may mean the resumption of the dollar’s decline and the recovery of gold.”
Financial markets expect the target interest rate for the Federal Reserve to peak at 5.188 percent in July, versus the current range of 4.5-4.75 percent.
It fell 0.2%, making gold priced in the US currency less expensive for buyers who hold other currencies.
As for other precious metals, it remained unchanged in spot transactions at $21.97 an ounce, and platinum rose 0.1 percent to $954.76, while it rose 0.2 percent to $1,569.07.
(Prepared by Amira Zahran for the Arabic Bulletin – Edited by Ali Khafaji)
