Last Update: May 10, 2023, 01:01 AM IST
Investors were closely monitoring developments in the US banking sector after a Fed survey released on Monday showed banks tightened credit standards in the first months of the year. (Representative Image/AP)
While gold is considered a hedge against inflation, rising interest rates reduce the appeal of non-yielding bullion.
Gold rose on Tuesday as investors sought cover from economic uncertainty along with positioning for US inflation prints for signs on the trajectory of interest rates.
Spot gold was up 0.8% at $2,036.56 an ounce at 1:41 p.m. EDT (1741 GMT), while US gold futures were up 0.5% at $2,042.90.
Equity markets fell on concerns about a recovery in China’s domestic demand and the impasse over the US debt ceiling following weak Chinese trade data.
“It’s going to be a risky day,” said Philip Streibel, chief market strategist at Blue Line Futures in Chicago, as markets await US consumer price index data on Wednesday.
Strebel said a warmer-than-expected CPI would strengthen bets for a rate hike, but very weak data could lead to “a large rush into commodities across the board and further liquidation in the dollar.”
While gold is considered a hedge against inflation, rising interest rates reduce the appeal of non-yielding bullion.
Fed Governor Philip Jefferson said the US economy is slowing in an “orderly way”, causing inflation to ease even as growth continues. may need to leave.
Markets are pricing in an 82% chance of the Fed keeping rates on hold in June and a 33% chance of a cut in July.
Commerzbank analyst Carsten Fritsch, however, wrote in a note that there is little room for the Fed to implement a rate cut this year.
Investors were closely monitoring developments in the US banking sector after a Fed survey released on Monday showed banks tightened credit standards in the first months of the year.
Silver rose 0.4% to $25.66 an ounce, while platinum gained 3.1% to $1,103.25. Palladium rose nearly 1% to $1,569.02.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
