Gold held steady early on Tuesday morning on expectations of fewer rate hikes by the Fed and a recovery in Chinese equities. REUTERS/RICK WILKING
Gold held steady early on Tuesday morning on expectations of fewer rate hikes by the Fed and a recovery in Chinese equities. REUTERS/RICK WILKING

Bengaluru — Gold prices held steady on Tuesday, supported by market expectations of fewer interest-rate hikes in the year by the US Federal Reserve, while a bounce in Chinese equities stoked interest in riskier assets.

Spot gold edged about 0.1% lower to $1,290.80 an ounce at 4am GMT, while US gold futures were unchanged at $1,291.4 an ounce.

Image: Iress

“We will see market resistance until we see some catalyst that will give some boost to safe-haven assets,” said Kyle Rodda, a market analyst at IG, Australia.

“Markets are sitting on their hands and waiting for more information about the subjects that matter to them.”

Asian stocks recovered on Tuesday after Beijing signalled more supportive measures to stabilise a slowing economy, and emphasised that China is seeking a strong start in the first quarter.

Meanwhile, the dollar weakened on heightened expectations the Fed will hold off on raising rates this year due to a slowdown in global growth.

Market participants think that worries of slowing domestic and global growth as well as tame US inflation will make Fed policymakers hesitant to raise interest rates.

Gold tends to gain on expectations of lower interest rates, as they reduce the opportunity cost of holding non-yielding bullion.

Spot gold looks neutral in a range of $1,285-$1,299 an ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao.

Markets will be keenly looking out for any progress in Brexit negotiations as UK’s parliament will vote on Prime Minister Theresa May’s deal, which already looks set to be rejected by lawmakers.

“If anything goes wrong in today’s meeting, it will be supportive of gold,” said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India.

Among other precious metals, palladium rose 0.2% to $1,325.50 an ounce. In the previous session, the metal was trading just below the all-time high of $1,342.43 reached last week.

Platinum was unchanged at $799.50 an ounce, while silver gained 0.2% to $15.68. 

Reuters