Gold Prices Rise as Dollar Weakens
Gold prices rose today, Tuesday, supported by the decline of the dollar, as investors’ focus shifts to US inflation data scheduled for later this week.
Those data will shed further light on the timing of the first interest rate cut by the US Federal Reserve this year.
Gold rose 0.1% in spot transactions to $2172.82 an ounce by 0122 GMT, while US gold futures fell 0.1% to $2173.70 an ounce.
The dollar index fell 0.3% against a basket of major currencies, making gold purchases less costly for holders of other currencies.
According to Reuters, gold prices reached a record level last week after policymakers at the Federal Reserve signaled they still expect to cut interest rates by three-quarters of a percentage point by the end of 2024 despite recent high inflation readings.
Austin Goolsbee, president of the Federal Reserve Bank of Chicago, said Monday that he proposed during the Fed’s monetary policy meeting last week to make three interest rate cuts this year.
At the same time, Lisa Cook, a member of the Federal Reserve Board of Governors, warned that the Federal Reserve needs to proceed cautiously when deciding when to start lowering interest rates.
Investors are now looking forward to the release of US core personal consumption expenditure price index data scheduled for Friday.
The index is expected to rise by 0.3% in February, keeping the annual rate at 2.8%.
Traders estimate a 70% chance that the Federal Reserve will begin cutting interest rates in June, according to CME Group’s Fed Watch monitoring service.
A decline in interest rates would reduce the opportunity cost of holding bullion, while for other precious metals, silver remained steady in spot transactions at $24.68 an ounce.
Platinum rose 0.4% to $906.10, while palladium also increased by 0.4% to $1009.14.
