Gold prices rose during these trading moments, today, Tuesday, after the decline of the dollar, which was about to reach its lowest level in more than a year.
Traders are awaiting retail sales data from the US to gauge any impact on the US Federal Reserve's monetary tightening path.
Everyone is waiting for the Fed's decision, which is the most important event that moves global markets and writes the future of trading and trends for gold and the dollar.
Gold and the dollar now
Gold futures rose 0.3% to $1,962 an ounce.
While spot contracts rose 0.2% to 1959 dollars an ounce.
On the other hand, the dollar index fell by 0.05% to 99.475 points.
gold when settling yesterday
Gold prices fell when settling transactions, yesterday, Monday, with the evaluation of economic data from the United States, which tipped the Federal Reserve’s interest in the need for monetary tightening, and represented support for the dollar index.
New York Federal Reserve data showed that industrial activity in New York State was stable during July, as it remained for the second consecutive month in the positive range above the boundary between growth and contraction, after the main business conditions index in the Empire State survey recorded 1.1 points during the month. .
The survey showed that the number of employees rose to the positive range for the first time since January, as it recorded during the month 4.7 points, reflecting a slight increase in employment.
Gold's losses were increased by the issuance of economic data from China, which reflected the slowdown in growth of the world's second largest economy during the second quarter of this year, as it recorded a growth of 0.8%, compared to 2.2% in the previous quarter.
Gold futures for August delivery fell by 0.4%, or $8, to $1956.4 an ounce.
gold attraction
The dollar fluctuated near a one-year low providing bullish support for gold. A weaker dollar makes gold cheaper for holders of other currencies.
Christopher Wong, executive director and foreign exchange strategist at OCBC, said that although the upcoming US central bank meeting may dispel gold's appeal, the Fed is close to ending the monetary tightening cycle.
Interest rate futures showed that markets are pricing in another 25 basis point rate hike at the Fed's July 25-26 meeting.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
Wong added: We prefer gold in the long term as a hedge against risks from slowing global growth or from any risks occurring in the market in general.
Investors expect the European Central Bank and Bank of England to go further in the rate hike cycle, as they try to bring inflation down to 2% which was at 5.5% in June and 8.7% in May respectively.
Minutes from the RBA's July policy meeting earlier today showed a restrained stance, opting to keep interest rates steady this month.
Investors will also be watching US retail sales for June later in the day, while weak Chinese economic data released the previous day continued to weigh on sentiment.
Yellen's remarks
Speaking to Bloomberg TV on Monday, Treasury Secretary Janet Yellen said she does not expect the US economy to enter a recession.
Yellen said, during a meeting with financial officials of the Group of Twenty, that the slowdown in growth in China may extend its impact to other economies, however, the US economy is on a good path to reduce inflation, with the continued strength of the labor market.
Regarding the United States, Yellen said, growth is slowing, but our labor market is still very strong. I do not expect a recession. The latest inflation data is very encouraging.
