Gold rises amid Dollar decline and focus on US inflation
Gold prices rose on Tuesday as the dollar weakened, while investors awaited a key inflation report in the United States in a week filled with data and statements from Federal Reserve officials, seeking clues about possible timing for interest rate cuts.
By 06:20 GMT, spot gold climbed 0.1 percent to $2,033.34 per ounce, and US gold futures
rose 0.2 percent to $2,043.00 per ounce. The decline in the dollar makes the precious metal priced in it relatively cheaper for buyers with other currencies.
Ajay Kedia, managing director at Kedia Commodity in Mumbai, said, “Ahead of the inflation data, we expect some consolidation. Our estimate is that gold will trade within a very narrow range.”
Kedia added that gold received support after Japan and Britain entered a technical recession, a trend that affects the gold-to-silver ratio, which currently stands at 90 ounces of silver to one ounce of gold. He continued, “But there is no change in the war premium, as all factors have already had their impact.”
Recent comments from Federal Reserve policymakers have indicated that the bank is not in a hurry to cut interest rates, significantly supporting bets that there will be no rate cuts before June.
The lower interest rates increase the attractiveness of holding non-yielding bullion.
As for other precious metals, spot platinum jumped 0.6 percent to $884.90 per ounce, while palladium rose 0.3 percent to $951.63, and silver edged up 0.1 percent to $22.57 per ounce.
