By Harshit Verma
(Reuters) – Gold prices edged higher on Tuesday as investors took stock of developments in the Middle East and awaited Federal Reserve Chair Jerome Powell’s speech later this week for more cues on the U.S. interest rate path.
Spot gold was up 0.2% at $1,922.89 per ounce by 0958 GMT, and U.S. gold futures rose 0.1% to $1,935.50.
“The Precious metal is likely to remain heavily influenced by Fed rate expectations and geopolitical risk. Much focus will be on Jerome Powell. If Powell strikes a hawkish tone, this could boost Fed hike bets, pressuring gold prices as a result,” FXTM senior research analyst Lukman Otunuga said.
U.S. President Joe Biden will visit Israel on Wednesday as the country prepares to escalate an offensive against Hamas militants that has raised fears of a broader conflict with Iran.
Gold is often used as a safe investment during times of political and financial uncertainty.
“It (gold) has eased to around $1,920 but there seems to be some pushback against a steeper retreat amid the volatile nature of this conflict that’s keeping investors on alert,” Raffi Boyadjian, lead investment analyst at forex broker XM, said.
Investors’ focus will be on Powell’s speech on Thursday after dovish signals by top policymakers in recent weeks, raising expectations that rates may have peaked.
The U.S. retail sales report and industrial production data, due later today, will also be scrutinized to gauge the economic strength of the world’s biggest economy.
Keeping gold gains in check, the dollar edged 0.1% higher, making gold more expensive for other currency holders, while the benchmark U.S. 10-year Treasury yield rose to a more than one-week high. [USD/] [US/]
Meanwhile, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.8% on Monday. [GOL/ETF]
Silver firmed 0.6% to $22.73 per ounce, platinum rose 0.6% to $896.07. Palladium was down 0.5% to $1,137.36.
(Reporting by Harshit Verma in Bengaluru; Editing by Sonia Cheema)
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