By Rahul Paswan
(Reuters) – Gold prices edged up on Tuesday despite an uptick in the U.S. dollar as investors awaited key U.S. inflation data and the conclusion of the U.S. Federal Reserve’s two-day monetary policy meeting on Wednesday.
Spot gold rose about 0.1% to $2,312.70 per ounce by 1808 GMT. U.S. gold futures settled mostly unchanged at $2,326.60.
“People are nervous about the Fed meeting tomorrow because if inflation numbers do not show any improvement, the Fed will not signal that it will be lowering rates anytime soon, meaning both the dollar and U.S. interest rates will push up which is negative for gold,” said Marex analyst Edward Meir.
The dollar index hovered near a one-month peak hit earlier in the session, making gold expensive for buyers outside the U.S. [USD/]
The Fed is expected to cut the interest rate in September and once more this year, according to a Reuters poll that also showed a significant risk that the central bank might opt for only one or none at all.
High interest rates make bullion less appealing against yielding assets.
“Next key level is on the downside just above $2300. If gold falls below that, it’s much more likely that gold falls further and retests the $2200 level,” said Everett Millman, chief market analyst with Gainesville Coins.
Led by U.S. jobs data and news that China’s central bank held off on gold purchases for its reserves in May, prices dropped by over 3.5% on Friday, marking bullion’s sharpest daily drop since November 2020.
However, China is expected to resume its bullion shopping spree once prices ease from the record highs hit in May, industry players said at a conference this week.
Among other metals, spot silver fell over 2% to $29.16 per ounce, platinum was down 1.5% at $952.67 and palladium lost 2% to $885.75.
(Reporting by Rahul Paswan in Bengaluru; Editing by Christina Fincher, Tasim Zahid and Alan Barona)
