Gold held steady on Tuesday supported by an easing dollar, with investors looking to a speech later in the day by Federal Reserve Chair Janet Yellen for clues on the outlook for U.S. monetary policy. Yellen is scheduled to take part in a discussion on global economic issues at London’s Royal Academy. She will likely reiterate the central bank’s positive views about the U.S. economy and the Fed’s stance of raising interest rates once more this year, said OCBC analyst Barnabas Gan.
Spot gold had risen 0.1 percent to $1,244.96 per ounce by 0428 GMT. It hit a near six-week low of $1,236.46 in the previous session. U.S. gold futures for August delivery fell 0.1 percent to $1,245.40 per ounce. “We remain somewhat cautious about gold here as the poor looking charts and the fact that funds seem to be paring length should keep the pressure on the complex for a while longer,” said INTL FCStone analyst Edward Meir.
“We think prices could eventually get to the $1,220-$1,225 level, at which point we could see some bargain-hunting set in by those betting that the stronger dollar and the better tone in U.S. stocks could be derailed, at least temporarily,” Meir added. On Monday, gold tumbled to its lowest price in nearly six weeks as a large sell order hit sentiment, though losses were limited by political uncertainty around the world.
“We are still keeping out eye on geopolitical tensions, gold thrives in uncertainty – and increased uncertainty in the near term should actually push gold prices up,” said OCBC’s Gan. Allegations of ties to Russia have cast a shadow over U.S. President Donald Trump’s first five months in office, while the British government’s looming Brexit talks are also fueling concern about global stability.
Meanwhile, tensions rose as the U.S. Supreme Court on Monday handed a victory to President Trump by reviving parts of a travel ban on people from six Muslim-majority countries. Among other precious metals, silver rose 0.2 percent to $16.58 per ounce. Palladium climbed 0.1 percent to $866.00 per ounce. Platinum inched up 0.3 percent to $915.10 per ounce. It touched its lowest since May 11 in the previous session.
The dollar index , which tracks the greenback against a basket of six major rivals, slipped 0.1 percent. The recent narrowing of credit spreads, record stock prices and falling bond yields could encourage the central bank to continue tightening U.S. policy, influential Fed official William Dudley said according to remarks published on Monday.