GOLD prices held steady on Tuesday despite a stronger dollar and elevated Treasury yields, as investors awaited the minutes of the last US Federal Reserve policy meeting for more clues on its interest rate cut timing.
Spot gold was flat at US$2,018.03 per ounce, as of 0341 GMT. Most of the US markets were closed on Monday for the President’s Day holiday.
US gold futures rose 0.3 per cent at US$2,029.10 per ounce. The dollar index was up 0.1 per cent and yields on benchmark 10-year Treasury notes were up near 4 per cent levels, making greenback-priced bullion less appealing to overseas buyers.
“With the US on a long weekend and a lack of market-driving news, volatility levels are lower across the board,” City Index senior analyst Matt Simpson said.
“I doubt we’ll glean too much from the FOMC (Federal Open Market Committee) minutes since Fed members have been highly vocal on their stance, and the meeting was ahead of last week’s inflation data.. that means gold might continue to be a technically-driven market over the near-term.”
The minutes from the Fed’s January policy meeting is due on Wednesday.
Despite “remarkable” progress on US inflation, Fed Bank of San Francisco President Mary Daly said “there is more work to do” to ensure stable prices. Another Fed official also cautioned against delaying rate cuts for too long.
Hotter-than-expected US consumer prices and producer prices data last week dashed hopes around a Fed rate cut in March.
Markets are currently pricing a 75 per cent chance of a cut in June, according to the CME Fed Watch Tool. Lower interest rates decrease the opportunity cost of holding bullion.
Spot platinum fell 0.6 per cent to US$893.16 per ounce, palladium was down 0.8 per cent to US$946.41, while silver also fell 0.4 per cent to US$22.93 per ounce. REUTERS
