Gold slips as fading expectations of sharp rate cut lift dollar

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Published: July 9, 2019 7:56:28 AM

The dollar index was hovering near a three-week high on Tuesday after investors rolled back expectations for a sharp U.S. rate cut at the end of July.

Gold prices, US interest rate cut, Federal Reserve, COMEX gold, SPDR Gold TrustSpot gold was down 0.3% at ,391.65 per ounce at 0118 GMT. (Reuters)

Gold prices fell on Tuesday as the dollar held near multi-week highs after investors reduced bets on an aggressive U.S. interest rate cut this month.

FUNDAMENTALS

* Spot gold was down 0.3% at $1,391.65 per ounce at 0118 GMT.

* U.S. gold futures slipped 0.4% to $1,395.10 an ounce.

* The dollar index was hovering near a three-week high on Tuesday after investors rolled back expectations for a sharp U.S. rate cut at the end of July.

* Money market futures are still fully pricing in a 25 basis point cut at the Federal Reserve’s next policy meeting on July 30-31, but have almost priced out a larger 50 basis point reduction.

Also read: Oil prices drop as trade tensions stoke economy worries

* Fed chief Jerome Powell’s comments in two-day testimony to Congress beginning on Wednesday will be closely watched to determine whether traders will continue to pare bets for deep interest rate cuts.

* Asian stocks struggled to make a rebound on Tuesday.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.15% to 795.80 tonnes on Monday from 796.97 tonnes on Friday.

* Hedge funds and money managers raised their bullish stance in COMEX gold in the week to July 2, the U.S. Commodity Futures Trading Commission (CFTC) said on Monday in a report delayed because of the U.S. Independence Day holiday. DATA AHEAD (GMT)

* 1245 US Federal Reserve Chairman Jerome Powell gives opening remarks via satellite before the “Stress Testing: a Discussion and Review” conference hosted by the Federal Reserve Bank of Boston in Boston

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