Gold edges up as dollar eases on weak US data
Gold prices rose for a fourth day on Tuesday as the dollar eased on signs of slower economic activity in the United States that dented expectations of an aggressive string of interest rate hikes by the US Federal Reserve.
The New York Federal Reserve bank said on Monday its Empire State Manufacturing Activity index, a report on business activity in the state, unexpectedly fell in May, sinking into negative territory for the first time since October. The weaker-than-expected report could be a harbinger a possible deterioration in the US manufacturing sector.
Spot gold gained 0.3 per cent at $1,233 per ounce at 0403 GMT. On Monday, it touched its highest since May 4 at $1,237.26.
US gold futures were up 0.3 per cent at $1,233.60 an ounce.
"In the shorter term it (weaker US data) could lift gold prices to a certain extent as it ensures the pace of the interest rate hikes do not accelerate," said Mark To, head of research at Hong Kong's Wing Fung Financial Group.
Expectations of a US rate increase in June fell to 74 per cent compared to 84 per cent last week, according to the CME Fedwatch.
Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.
Risk aversion sentiment due to recent global developments including the North Korean missile test, the massive "ransomware" cyber attack and controversies surrounding US President Donald Trump could lift gold prices over the next two weeks, Wing Fung's To added.
Gold is used as an alternative investment during times of political and financial uncertainty.
Spot gold may rise more to $1,245 per ounce, as it has cleared a resistance at $1,233, according to Reuters technical analyst Wang Tao.
Paulson & Co held its stake steady in the world's biggest gold exchange-traded fund while Soros Fund Management stayed out of the precious metal in the first quarter of 2017, when bullion prices rallied to 3-and-a-half-month highs, a filing showed on Monday.
In the wider markets, the dollar index traded near a one-week low versus a basket of major currencies on Tuesday.
Among other precious metals, silver rose 0.6 per cent at $16.69 an ounce.
The New York Federal Reserve bank said on Monday its Empire State Manufacturing Activity index, a report on business activity in the state, unexpectedly fell in May, sinking into negative territory for the first time since October. The weaker-than-expected report could be a harbinger a possible deterioration in the US manufacturing sector.
Spot gold gained 0.3 per cent at $1,233 per ounce at 0403 GMT. On Monday, it touched its highest since May 4 at $1,237.26.
US gold futures were up 0.3 per cent at $1,233.60 an ounce.
"In the shorter term it (weaker US data) could lift gold prices to a certain extent as it ensures the pace of the interest rate hikes do not accelerate," said Mark To, head of research at Hong Kong's Wing Fung Financial Group.
Expectations of a US rate increase in June fell to 74 per cent compared to 84 per cent last week, according to the CME Fedwatch.
Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.
Risk aversion sentiment due to recent global developments including the North Korean missile test, the massive "ransomware" cyber attack and controversies surrounding US President Donald Trump could lift gold prices over the next two weeks, Wing Fung's To added.
Gold is used as an alternative investment during times of political and financial uncertainty.
Spot gold may rise more to $1,245 per ounce, as it has cleared a resistance at $1,233, according to Reuters technical analyst Wang Tao.
Paulson & Co held its stake steady in the world's biggest gold exchange-traded fund while Soros Fund Management stayed out of the precious metal in the first quarter of 2017, when bullion prices rallied to 3-and-a-half-month highs, a filing showed on Monday.
In the wider markets, the dollar index traded near a one-week low versus a basket of major currencies on Tuesday.
Among other precious metals, silver rose 0.6 per cent at $16.69 an ounce.