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Picture: GETTY IMAGES/DONAT SOROKINVIA
Picture: GETTY IMAGES/DONAT SOROKINVIA

Bengaluru — Gold edged lower on Tuesday due to a slightly stronger dollar, but prices were in a tight range as investors refrained from making big bets ahead of central bank meetings.

Spot gold was down 0.1% at $1,707.29 an ounce at 3.13am GMT. US gold futures fell 0.3% to $1,705.10.

The dollar rose 0.1% against its rivals after falling in the last two sessions, making greenback-priced bullion more expensive for buyers holding other currencies.

“Gold remains in a comatose state, unable to sustain gains above $1,720 and unable to rally even as the US dollar fell overnight,” Oanda senior analyst Jeffrey Halley said. “That keeps the technical picture for gold very negative. It has an initial support at $1,700, but a sustained break and a couple of daily closes below $1,675 signal a much larger fall is in play.”

Offering some respite to gold, expectations for a 100 basis point rate hike by the US Federal Reserve at its policy meeting next week stood at about 30%, according to CME’s FedWatch Tool after reaching as high as 80% last week.

Market participants are anticipating a 75 basis point hike by the Fed at its July 26-27 meeting. The European Central Bank and the Bank of Japan both are meeting on Thursday, with the ECB widely expected to deliver a 25 basis point hike.

Though gold is seen as an inflation hedge, higher interest rates raise the opportunity cost of holding bullion, which yields no interest.

Meanwhile, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.5% to 1,009.06 tonnes on Monday, its lowest since late-January.

Elsewhere, spot silver fell 0.3% to $18.61 an ounce and platinum slipped 0.6% to $857.40, while palladium climbed 1.2% to $1,877.89.

Reuters

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