Spot gold inched up 0.1% at $1,695.48 an ounce on Tuesday, backed by a weaker dollar. Picture: REUTERS/MICHAEL BUHOLZER
Spot gold inched up 0.1% at $1,695.48 an ounce on Tuesday, backed by a weaker dollar. Picture: REUTERS/MICHAEL BUHOLZER

Bengaluru — Gold prices edged higher on Tuesday buoyed by a weaker dollar, but the metal traded in a narrow range as caution set in ahead of the US Federal Reserve’s two-day monetary policy meeting.

Spot gold was up 0.1% at $1,695.48 an ounce by 2.50am GMT. US gold futures eased 0.2% to $1,701 an ounce.

“Given the enthusiasm for risk and growth exposed assets, we could see pressure come to gold during the session, but on the other hand the weaker US dollar is supportive,” said Michael McCarthy, chief strategist at CMC Markets.

The US dollar hovered near a three-month low, making gold cheaper for holders of other currencies.

Investors’ focus is now on the US central bank’s two-day monetary policy meeting, starting later in the day, for any forward guidance as economy gradually starts showing signs of recovery.

Traders stopped pricing for the possibility of negative rates in the US, after a surprisingly strong employment report last Friday.

Limiting gold’s advance, market participants favoured riskier assets as confidence in an economic recovery pushed the Nasdaq benchmark to a record high. Asian stocks were also set to climb.

“The metal is on a reasonably steady downtrend, most likely on the back of the great run in equity markets over the past few weeks, which could see fast money continue to sell on rallies,” said Stephen Innes, chief market strategist at financial services firm AxiCorp, in a note.

Among other precious metals, silver dropped 1.6% to $17.57 an ounce, palladium fell 0.5% to $2,013.41, while platinum edged 0.1% higher to $833.35.

Reuters

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