A woman in Mumbai mistakenly gave away her bag of gold jewellery to a beggar (Representative Image)
Gold prices edged up on Tuesday as the dollar eased, while investors kept a keen eye on posturing from major central banks on interest rate hikes for a clearer outlook for bullion.
A weaker dollar makes greenback-priced bullion more attractive for buyers holding other currencies. [USD/]
Spot gold was up 0.2% at $1,841.13 per ounce by 0200 GMT, after largely range-bound trading on Monday. U.S. gold futures firmed 0.1% to $1,842.90.
However, benchmark U.S. 10-year Treasury yields rose, capping gains in zero-yielding gold. [US/]
“The (gold) market is sitting tight as, after a historic week for global central banks; policymakers will get to explain the reasoning behind their decisions this week,” said Stephen Innes, managing partner at SPI Asset Management.
The U.S. Federal Reserve last week approved its largest interest rate increase in more than a quarter of a century to try and stem a surge in inflation.
Fed Chair Jerome Powell will deliver a semi-annual monetary policy testimony before the Senate Banking Committee and the House Financial Services Committee later this week on Wednesday and Thursday respectively.
“While the street does not expect Powell to reinvent the policy wheel, we could expect him to reinforce the idea that the Fed is in data-dependent mode. Hence, gold and every interest-rate sensitive risk asset will be subject to headline risk,” Innes said.
A series of surprise actions by some of the world’s largest central banks fretting about runaway inflation has left bond investors battered. Now, a growing chorus of investors is calling on policymakers to move fast to end the uncertainty.
Although bullion is often seen as an inflation hedge, higher interest rates and bond yields increase the opportunity cost of holding gold, which yields nothing.
Spot silver rose 0.5% to $21.68 per ounce, platinum climbed 0.7% to $937.88, and palladium gained 0.7% to $1,859.40.
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