Gold remains flat in early trade

25 Jul 2023 , 10:35 AM

Early on Tuesday in Asian trading, gold prices struggled to find direction as investors prepared for the widely anticipated rate hike and monetary policy hints from the U.S. Federal Reserve over the next two days.

Spot gold was up 0.2% to $1,958.20 per ounce, while U.S. gold futures were down 0.1% at $1,959.90.

The dollar index was almost at a two-week high, which hurt gold because purchasers holding other currencies must pay more for metal when the currency is strong.

Rate increases of one-quarter point from the Fed and the ECB are completely priced in the markets. In light of this, attention will be focused on what Fed Chair Jerome Powell and ECB President Christine Lagarde have to say about the future and their September meetings.

As the opportunity cost of storing non-yielding bullion increases, gold is particularly susceptible to rising interest rates.

A widely watched poll of purchasing managers on Monday revealed that while European company activity shrank more than anticipated in July, U.S. business activity stalled, suggesting that both central banks may be nearing the end of their rate-hike cycles.

Leaders in China promised to provide policy assistance for the economy amid a difficult post-COVID recovery, with an emphasis on increasing domestic demand. However, details were scant, and analysts think officials are unlikely to offer any dramatic stimulus due to concerns about rising debt problems.

Silver spot prices increased by 0.2% to $24.42 per ounce, platinum increased by 0.3% to $959.24, and palladium increased by 0.9% to $1,281.86.

For feedback and suggestions, write to us at [e-mail]