Gold Holds Steady as Higher-for-Longer Rate Outlook Weighs

Gold prices remained largely unchanged on Tuesday as expectations of prolonged higher interest rates limited demand for the non-yielding asset, while investors awaited further guidance from US Federal Reserve officials.

 

Spot gold was little changed at $4,344.29 per ounce as of 0151 GMT, while US gold futures held steady at $4,381.80.

 

Markets are watching upcoming comments from Fed policymakers for clues on the central bank’s next interest-rate move, including the possibility of another hike in October. Limited US economic data this week has shifted attention toward central bank commentary and developments in commodity markets.

 

Higher interest rates generally weigh on gold by increasing the attractiveness of yield-generating assets. A renewed rise in crude oil prices could also reinforce inflation concerns and strengthen expectations for tighter monetary policy, adding pressure to bullion.

 

The Fed raised its policy rate by 25 basis points last week and signalled that further increases could be needed. St. Louis Fed President Alberto Musalem has also said additional tightening may be required to contain inflation linked to strong demand and broader commodity price pressures.

 

Elsewhere in precious metals, spot silver rose 0.3% to $66.19 an ounce, while platinum gained 0.3% to $1,792.76 and palladium increased 0.3% to $1,305.10.