Gold prices are stuck in a narrow range as investors look ahead to Powell’s testimony and the Fed’s rate hike plans.
Gold prices were flat on Tuesday as investors awaited further guidance on interest rates from U.S. Federal Reserve Chair Jerome Powell. The Fed is expected to keep rates unchanged at its meeting later this week, but Powell’s testimony could provide clues about the central bank’s future plans.
Gold is considered a safe-haven asset and is often bought when investors are worried about the economy. However, rising interest rates make gold less attractive, as they increase the opportunity cost of holding non-yielding bullion.
The U.S. dollar was also firm on Tuesday, making gold less attractive for overseas buyers.
“Gold prices seem to look exhausted lately,” said Yeap Jun Rong, market analyst at IG. “The more cautious risk tone in today’s session may aid to drive some safe-haven flows into gold, but while that can provide some short-term cushion, the upside could still be capped.”
Spot gold was trading at $1,950.19 per ounce at 2:00 PM ET. U.S. gold futures were down 0.5% to $1,962.00.
Among other precious metals, spot silver was flat at $23.9284 per ounce and palladium fell 0.8% to $1,396.01. Platinum dropped 0.6% to $969.82, set for a third consecutive session of losses.
What to watch:
- Powell’s congressional testimony on Wednesday and Thursday
- U.S. economic data, including the release of the June jobs report on Friday
- The direction of the U.S. dollar
Overall, gold prices are likely to remain in a narrow range in the near term as investors await further clarity on the Fed’s rate hike plans.