Gold prices inched higher during the course of the session on Tuesday after Monday’s disappointing U.S. data, which constantly dragged down the dollar as investors were closely watching on the Fed’s policy statement due later this week.
On he Comex division of the New York Mercantile Exchange, gold future June delivery rose 0.17% and stood at $1,257.70 in late trade.
The June contract was higher 0.13% during the session on Thursday at ended at $1,265.90 an ounce.
In a statement from the Institute of Supply Management on Monday, the dollar weakened after the manufacturing purchasing manager’s index declined to 54.8 in April from last month’s 57.2 reading, compared to the expected downtick of 56.5.
Based on a separate report, the U.S. personal spending remained flat in March, missing the expected 0.2% rally after posting 0.1% gain.
The U.S. dollar index, which gauges the dollar’s strength against a basket of major currency peers slightly changed at 98.97.
It is essential to note that gold finds support on a weaker U.S. dollar as it boosts exposure on the metals, in which investors flocks on safe-haven assets, making the dollar-priced commodities much cheaper for holders of other currencies.
According to the U.S. Treasury Secretary Steven Mnuchin, the 3% economic growth can be attained in the next two years as U.S. President Donald Trump made promises to cut corporate taxes.
Conversely, investors focus on the Federal Reserve’s two-day policy meeting and eyes for further hints for a future rate hikes, considering that the central bank is expected to hold interest rates.
Elsewhere in metals trading, silver futures May delivery gained 0.90% to settle at $16.993 a troy ounce, while copper futures May delivery declined 1.15% to $2.630 a pound in late trade.
Gold Near 3-week Low
Gold held near three-week lows amid the last session on decreasing demand for safe-haven bullion as stocks rose and the US dollar strengthened against the yen.
Spot gold was slightly changed at $1,255.90 per ounce, while bullion prices on Monday declined 0.9 percent to $1,253.66 an ounce, marking its weakest level since April 11.
US gold futures added 0.1 percent at $1,256.70 an ounce.
"Gold is just shy of important daily support today in the shape of its 200-day moving average at $1,253. A daily close below here would be a bearish technical development," senior analyst Jeffrey Halley said.
"The fall (on Monday) implies that the safe haven bid that has underpinned gold in recent times is rapidly eroding."
The chart below illustrates gold price movement in the wake of a disappointing U.S. data and as investors closely watched the Federal Reserve’s policy statement due later this week. The commodity is currently trading at 1257.50 in a light trading volume.
As gold prices were slightly showing rebounds, it is expected that the safe-haven asset will continue to rise if the dollar will remain under pressure. The dollar sentiment could wobble due to the Fed’s most awaited policy statement.
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