By Ashitha Shivaprasad
(Reuters) – Gold prices held steady on Tuesday, supported by safe-haven demand for bullion as Gaza ceasefire remains uncertain and also bets that the U.S. Federal Reserve would cut interest rates later this year.
Spot gold was steady at $2,320.69 per ounce, as of 0638 GMT, after rising more than 1% in the previous session.
U.S. gold futures were flat at $2,328.40.
“Gold has been slowly building a base for the past week, to show demand sits around $2,280. The Fed continue to make noise about the next move likely to be lower, and that’s certainly helped shake a few bears out at these lows,” said City Index senior analyst Matt Simpson.
Fed Bank of New York President John Williams said on Monday that at some undefined point the U.S. central bank will lower its interest rate target.
Traders are pricing in a 67% chance of a Fed rate cut in September, as per CME’s FedWatch Tool. Lower rates increase the appeal of holding non-interest bearing gold.
“Concerns that the ceasefire in Gaza may fall through,” has also helped bullion, Simpson added.
Investors also closely monitored the latest developments in the Middle East conflict. Palestinian militant group Hamas on Monday agreed to a Gaza ceasefire proposal from mediators, but Israel said the terms did not meet its demands and pressed ahead with strikes in Rafah while planning to continue negotiations on a deal.
Spot silver fell 0.7% to $27.26 per ounce.
Platinum gained 0.5% to $959.25, while palladium lost 0.1% to $976.48.
“Platinum ETF (exchange-traded fund) inflows have begun to gather steam,” said Michael Hsueh, FX & Commodities Strategy analyst at Deutsche Bank in a note dated Monday.
“Platinum is one step closer to gold compared with palladium from an investment standpoint.”
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Rashmi Aich and Sherry Jacob-Phillips)
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