Gold rangebound as traders seek more U.S. data for Fed cues

Soegeefx AppsPrecious Metal MarketGold rangebound as traders seek more U.S. data for Fed cues


Gold prices rose slightly on Wednesday helped by lower Treasury yields, but were stuck in a tight range as investors waited for more U.S. data to gauge the Federal Reserve’s next step on monetary policy.

Spot gold was up 0.3% at $2,334.81 per ounce, as of 0312 GMT, trading in a narrow $11 range after prices fell 1% in the previous session.

U.S. gold futures rose 0.3% to $2,354.50.

Benchmark 10-year Treasury yields lingered near their lowest level in almost three weeks hit on Tuesday, making bullion more attractive to investors. 

“The key event is the ISM services report… the ideal scenario for gold bulls is to see the ISM services remain just below 50 level, with the prices paid component expanding at a slower pace – as this satisfies the ‘soft landing’ scenario the Fed are aiming for,” said City Index senior analyst Matt Simpson.

The U.S. services data is due at 1400 GMT. Markets are also awaiting the ADP employment report due at 1215 GMT on Wednesday and the non-farm payrolls data on Friday for further clues about the health of the U.S. economy and if it will deter the Fed from cutting rates in September. 

Higher interest rates increase the opportunity cost of holding the non-yielding asset.

Net purchases of gold by global central banks rose to 33 metric tons in April from a revised net buying of 3 tons in March, the World Gold Council said, signaling continuing strong appetite from the sector despite high prices for the metal.

Among other metals, spot silver rose 0.7% to $29.69 per ounce, platinum was up 0.6% at $992.85 and palladium gained 0.9% to $923.83.

Source : cnbc

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