BENGALURU- Gold prices inched higher on Tuesday after a sharp drop in the previous session, with investors awaiting Federal Reserve Chair Jerome Powell’s testimony before Congress and June inflation data to assess the next policy move by the US central bank.
Spot gold was up 0.1 percent at $2,361.77 per ounce, after falling more than 1 percent on Monday. US gold futures firmed 0.3 percent to $2,369.70.
Powell will deliver two days of testimony before Congress, beginning later in the day with the Senate and followed by the House on Wednesday.
“After recent weak data, the market has high hopes for two rate cuts before the year ends. If Powell directly or indirectly implies that weakness is seeping through the US economy, then it will be positive for gold,” said Kelvin Wong, a senior market analyst for Asia Pacific at OANDA.
A jobs report on Friday showed that the US labor market was losing steam as the unemployment rate climbed to 4.1 percent .
Markets are pricing in a 77 percent chance of a rate cut in September and a second one by December, according to CME’s Fedwatch Tool.
Non-yielding bullion’s appeal tends to shine in a lower interest rate environment.
