Gold steadied after dropping by the most in two weeks on Monday ahead of the Federal Reserve chief’s address to the Congress and US inflation data later this week, with both events likely to offer clues on the interest-rate path.
Bullion traded at around $2,362 an ounce following a 1.4% decline in the previous session before Fed Chair Jerome Powell’s semiannual testimony at Capitol Hill on Tuesday and Wednesday. He will likely face pressure from lawmakers urging for rate cuts.
Swaps data show traders are now pricing in two reductions this year, with a roughly 70% chance of the first one in September, after a mixed jobs report sent Treasury yields tumbling last week. Lower borrowing costs are typically a positive for bullion, which doesn’t pay interest.
Elsewhere, traders will be focusing on a report due Thursday that’s expected see the US core consumer price gauge — which excludes food and energy costs — rising 0.2% in June for a second month. That would mark the smallest back-to-back gains since August, a pace closer to what Fed officials would like to see in order to reduce rates.
Spot gold rose 0.1% to 2,362.5 an ounce as of 8:46 a.m. in Singapore, while the Bloomberg Dollar Spot Index was little changed. Silver held just below $31 an ounce, after declining 1.5% on Monday, while palladium and platinum climbed.
Source : Bloomberg
