Gold edged lower during early Asian trading on Tuesday, driven by a rebound in the dollar. However, the precious metal remained within a narrow trading range, with investors adopting a cautious approach as they anticipated comments from Federal Reserve officials, including Chair Jerome Powell.
Spot gold saw a marginal decline of 0.1%, with prices resting at $1,975.35 per ounce as of 0116 GMT, while U.S. gold futures also registered a 0.3% drop, settling at $1,982.10.
The dollar experienced a 0.1% uptick after touching a six-week low in the preceding session, which in turn made gold comparatively more expensive for holders of other currencies. Meanwhile, benchmark 10-year Treasury yields stood at 4.6327%.
Market participants are eagerly awaiting Chair Jerome Powell’s forthcoming speeches scheduled for Wednesday and Thursday. Their focus is on whether Powell will maintain the dovish stance he adopted following the Fed‘s recent policy meeting.
Federal Reserve Governor Lisa Cook expressed her hope on Monday that the current target interest rate set by the central bank would be adequate to steer inflation back towards the Fed’s 2% target.
Contrarily, Fed Bank of Minneapolis President Neel Kashkari suggested that the U.S. central bank may still have more work to do to control inflation effectively.
Futures markets are indicating an expectation that the Fed’s overnight lending rate will remain above 5% until at least next June.
Gold prices continue to be influenced by the evolving economic and monetary policy landscape, with investors keenly observing the balance between inflation concerns and potential interest rate adjustments by the Federal Reserve. Powell’s forthcoming remarks are poised to provide valuable insights into the central bank’s thinking, further shaping the direction of gold prices in the near term.
