Gold stable as investors wait for Powell's testimony to provide rate cues

20 Jun 2023 , 10:27 AM

Tuesday’s gold price volatility was owing to market players’ continued caution and their anticipation of Jerome Powell, the chairman of the U.S. Federal Reserve, who is scheduled to testify before Congress this week.

Spot gold held steady at $1,950.89 per ounce after falling on Monday due to light trading. At $1,962.60, U.S. gold futures were down 0.4%.

Following a ‘hawkish halt’ on tightening monetary policy, the markets are now looking forward to Powell’s congressional testimony, which is scheduled for Wednesday and Thursday.

Although interest rate increases the opportunity cost of owning non-yielding bullion, gold is nevertheless seen as an inflation hedge.

According to the CME Fedwatch tool, traders are currently factoring in a possibility of a Fed rate hike in July of approximately 74%.

Following to a Reuters survey, China is anticipated to ease lending standards on Tuesday for the first time in ten months as policymakers try to support the world’s second-largest economy’s sluggish recovery.

Based on a survey released on Tuesday, consumer confidence in New Zealand increased in the second quarter, but householders are still quite pessimistic about the future of the economy. 

In addition, the head of Slovakia’s central bank stated on Monday that the European Central Bank should increase interest rates once more in July since inflation risks are tilted in favour of more likely outcomes. 

On Thursday, the Bank of England is anticipated to increase rates by an additional 25 basis points.

Palladium increased by 0.3 to $1,410.36, while platinum decreased by 0.2% to $973.63. Spot silver was up 0.2% at $23.9945 per ounce.

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