Gold prices inch higher on Fed rate optimism with US data due
Gold prices edged higher on Tuesday, as recovering expectations of a U.S. rate cut in December weighed on the dollar and Treasury yields ahead of economic data that could offer further signals on the Federal Reserve's policy trajectory.
Spot gold rose 0.3% to $2,646.03 per ounce, as of 0921 GMT, after falling as much as 1% on Monday. U.S. gold futures gained 0.4% to $2,668.90.
"Several factors are influencing gold's price action, including expectations of a Fed rate cut in December, the 10-year Treasury yield hovering near its lowest level since October, and sustained safe-haven demand," said Ricardo Evangelista, senior analyst at ActivTrades.
Markets are pricing in a 72% probability of a 25-basis-point rate cut at the Dec. 17–18 meeting, up from 66% before Fed Governor Christopher Waller on Monday signalled support for a cut this month, citing inflation still forecast to fall to 2%.
Investors will also be watching job openings data due at 1500 GMT, the ADP employment report on Wednesday, and Friday's payrolls report.
Gold, which does not pay any interest, historically performs well in low-interest rate environments and during periods of geopolitical uncertainty.
"I anticipate gold prices to trade within a relatively narrow range, with resistance at $2,650 and support at $2,620," Evangelista added.
In other metals, spot silver added 1.6% to $30.97 per ounce, platinum rose 0.9% to $955.35 and palladium was up 1.1% to $991.75.
Source: reuters
