Gold price moves up slightly as dollar drops back
Bengaluru — Gold edged higher on Tuesday as the dollar dipped, with investors awaiting US Federal Reserve chair Jerome Powell’s speech later this week, while a rally in equity markets limited bullion’s advance.
Spot gold was up 0.2% to $1,935.88 an ounce by 3.35am GMT. US gold futures gained 0.1% at $1,941.60.
On Thursday, Powell is due to talk at a gathering of central bankers in Jackson Hole, Wyoming, where he is expected to provide further clarity on the US central bank’s efforts to revamp its approach to monetary policy.
“There is lot of focus on Jackson Hole symposium and Powell’s speech. I think the markets are reluctant to commit to a direction until that happens,” said DailyFx currency strategist Ilya Spivak, adding that gold prices are closely tracking movements in the dollar.
“We have seen a pullback in gold since the beginning of the month around the sense that maybe the Fed is not going to do much in terms of expanding its policy tool kit.”
The central bank has rolled out a wave of fiscal and monetary stimulus measures and cut interest rates to near zero to combat the economic toll caused by the pandemic, helping gold climb nearly 28% this year.
Lower interest rates decrease the opportunity cost of holding nonyielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies.
The dollar index fell 0.1% against its rivals on Tuesday. Limiting gold’s appeal, Asian stock markets rose as investors cheered signs of progress in US-China trade negotiations and after a fresh Wall Street rally.
On the technical side, spot gold may test a support at $1,911 an ounce, as suggested by its wave pattern and a projection analysis, said Reuters technical analyst Wang Tao.
Elsewhere, silver gained 0.6% to $26.71 an ounce, platinum rose 1.2% to $926.32, and palladium climbed 0.9% to $2,180.47.
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