Gold steadies with market eyeing US economic data
Gold steadied on Wednesday after falling in the previous session on improved risk appetite following a truce between Israel and Iran, while attention shifted to upcoming U.S. economic data.
Spot gold was little changed at $3,326.89 per ounce by 0823 GMT. On Tuesday, prices had hit their lowest level in over two weeks.
U.S. gold futures gained 0.2% to $3,341.40.
"De-escalation of tension in the Middle East, and less need for safe-haven assets, was a reason for gold giving up earlier gains yesterday. Still, uncertainty about the future of Iran’s nuclear program is likely to keep investors still preferring to hold some gold al__cpLocation," said Giovanni Staunovo, an analyst at UBS.
The ceasefire brokered by U.S. President Donald Trump between Iran and Israel appeared to be holding on Wednesday, the day after both countries signalled that their air war had ended.
The dollar index struggled to regain lost ground as investors decided to take on more risk following the truce. A weaker dollar makes greenback-priced bullion more attractive for holders of other currencies.
Global central bank reserves are eyeing a move away from the dollar into gold, the euro and China's yuan amid geopolitical upheaval, a report showed.
Gold is seen as a safe haven during turmoil and tends to perform well in low-interest-rate environments.
The market's focus is now on first-quarter U.S. GDP data due Thursday, which will offer insights into the pace of economic growth. On Friday, attention turns to the closely watched Personal Consumption Expenditures (PCE) report, the Federal Reserve’s preferred inflation gauge.
If the PCE data comes on the lower side, the pressure on the Fed to cut rates will increase further and help gold, Staunovo said.
Fed Chair Jerome Powell told members of Congress on Tuesday that higher tariffs could begin raising inflation this summer. Meanwhile, data showed U.S. consumer confidence unexpectedly deteriorated in June.
Spot silver fell 0.2% at $35.85, platinum lost 0.6% at $1,308.60, while palladium dipped 0.5% at $1,061.25.
Source: Reuters
