Supported by lower U.S. manufacturing and construction spending, gold prices held onto a three-month high on Tuesday as investors awaited Federal Reserve Chair Jerome Powell’s speech and important jobs data that was expected this week.
Spot gold was down 0.1% to $2,112.39 per ounce, but it was still close to Monday’s peak of $2119.69, which was reached on December 4. Gold futures in the US dropped 0.3% to $2,120.50.
At an afternoon auction on Monday, the benchmark gold price in London reached an unprecedented peak of $2,098.05 per troy ounce, exceeding the previous record of $2,078.40, which was established on December 28, according to the London Bullion Market Association (LBMA).
The Fed Chair Powell’s two days of congressional testimony on Wednesday and Thursday are the main focus of the market.
The Institute for Supply Management (ISM) services data at 1500 GMT, the Job Openings and Labour Turnover Survey (JOLTS) on Wednesday, and the non-farm payroll report on Friday are among the other economic announcements that could influence expectations for a rate cut in the United States.
Data released this week revealed that consumer confidence remained low, U.S. manufacturing declined more in February, and inflation gradually eased.
Atlanta Fed President Raphael Bostic stated on Monday that the Fed is not under immediate pressure to lower rates due to the ‘prospering’ economy and employment market. However, he did stress the possibility that inflation might remain above the central bank’s 2% objective or rise even further due to ‘pent-up exuberance.’
Based on LSEG’s interest rate likelihood app, traders now expect a 65% possibility of a June U.S. rate cut.
Non-yielding bullion is more appealing when interest rates are lower.
Spot silver lost 0.9% to $23.68, spot platinum slid 0.7% to $890.90 per ounce, and spot palladium sank nearly 1% to $951.12.
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