(Reuters) – Gold prices were flat on Tuesday, hovering slightly above their three-month lows, while the U.S. dollar strengthened as traders looked to hedge against a political turmoil in Russia and the Federal Reserve’s hawkish outlook.
FUNDAMENTALS
* Spot gold held its ground at $1,923.94 per ounce by 0114 GMT, while U.S. gold futures were also listless at $1,933.90.
* The dollar index edged up 0.1%, making greenback-priced bullion less attractive for overseas buyers. [USD/]
* Investors stuck to safe-haven assets such as dollar and gold in light of an aborted mutiny over the weekend in Russia.
* Russian President Vladimir Putin paid tribute to pilots killed over the weekend, confirming for the first time that Russian aviators had been lost in battle as the Wagner mercenary group marched on Moscow.
* A slew of economic data including a key inflation gauge, durable goods and University of Michigan’s consumer sentiment index is expected this week, as well as a speech from Federal Reserve Chair Jerome Powell that could throw light on the U.S. central bank’s rate-hike trajectory.
* In comments made public on Monday, Fed Bank of New York President John Williams highlighted the importance of restoring price stability, but also warned that using rate policy to tame bubbles can bring unwanted economic pain.
* Investors now expect a 74% chance of a rate hike in July, with rate cuts seen from 2024 onwards.
* High interest rates discourage investing in non-yielding gold, which is a safe investment during economic uncertainties.
* Traders are also watching JPMorgan’s nearly $16 billionHedged Equity Fund’s quarterly refresh of its options positions and quarter-end rebalancing as the first half of the year winds down. [.N]
* Elsewhere, markets expect stimulus policies to be unveiled by top gold consumer China after a regular meeting of the Communist Party’s political bureau in July.
* Spot silver gained 0.3% to $22.84 per ounce, platinum was flat at $924.93, while palladium rose 0.5% to $1,311.50.
DATA/EVENTS (GMT)
1000 France Unemp Class-A SA May
1230 US Durable Goods May
1400 US Consumer Confidence June
1400 US New Home Sales-Units May
(Reporting by Seher Dareen in Bengaluru; Editing by Sherry Jacob-Phillips)
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