Gold prices found stable grounds on Tuesday following losses earlier in the session as investors await hints at the US economy’s condition and comments from several Federal Reserve officials.
Spot gold was trading 0.2% higher at $1,924.50 per ounce, having posted an intraday drop of $1,912.44 earlier. Gold futures for December delivery gained 0.07% to $1,935.70 per ounce after logging a session low of $1,924.85.
The yellow metal has strengthened in the past week due to the war between Israel and the Palestinian militant group, Hamas, prompting market players to seek gold’s safety.
However, gold has shifted direction this week as the US saw consumer inflation rise more than expected, increasing concerns over extended higher interest rates from the central bank.
A lack of signs of conflict escalation has also weakened the potential for any near-term safe-haven demand. The US dollar, on the other hand, was trading close to 11-month highs.
In industrial metals, copper withdrew from recent surges on Tuesday as markets played it safe before China’s economic data releases for its gross domestic product (GDP) and industrial production this week.
Copper futures ended the session in New York with a 0.1% loss at $3.58 per pound.
Fed Speeches In Focus
The US consumer price index (CPI) grew 3.7% year-over-year in September, matching August’s reading of 3.7% and ending above expectations of 3.6%.
The figures raised the possibility of a sustained hawkish stance from the Fed as part of its efforts to curb a sticky inflation.
Markets await upcoming speeches from several Fed officials scheduled this week, particularly Fed Chair Jerome Powell’s on Thursday.
Investors will keep a close eye on Powell’s remarks following higher inflation data, considering the Fed Chair had signaled an extended period of higher rates in the last meeting.
Rising interest rates work against gold’s favor, as they drive up the opportunity cost of investing in the yellow metal. Such a scenario has weighed on gold through 2022 and may cap any significant increases until the central bank starts easing benchmark interest rates.
