Gold prices edged lower on Tuesday as the dollar stood firm near recent highs, although trading was fairly muted with markets looking for more cues on the US Federal Reserve’s policy path after a widely expected interest rate pause this month.
Spot gold was down 0.1 percent at $1,936.89 per ounce. US gold futures fell 0.2 percent to $1,962.70 after a US holiday on Monday.
“Much remains to be seen if rate cuts in 2024 follow and to what extent,” said Harshal Barot, a senior consultant at Metals Focus, adding that the possibility of US interest rates remaining higher for longer will keep gold price rallies in check.
And if the US economy indeed sees a soft landing, there is potential for more downside in gold as some of the aggressive rate cut expectations in the second half of next year will be pared back, Barot said.
Recent US economic data has backed bets of a soft landing scenario as worries about inflation and recession have somewhat eased, cemented expectations that the Fed might not have to raise interest rates further.
Investors will take cues on interest rates from Fed officials expected to speak during the week, ahead of the Sept. 19-20 policy meeting. – Reuters
