Gold prices struggled for momentum on Tuesday as expectations of higher-for-longer interest rates weighed on the precious metal, with investors awaiting further signals from US Federal Reserve officials on the path of monetary policy.
Spot gold was little changed at US$4,344.29 per ounce as at 0151 GMT, while US gold futures were steady at US$4,381.80.
Investors are watching comments from Fed officials for clues on whether another rate increase could come in October, alongside movements in crude oil prices, according to Chris Weston, head of research at Pepperstone.
“While crude has come modestly off its recent highs, a reversal higher that builds inflation expectations would only intensify the rates story, and gold would likely continue to face headwinds,” said Weston.
The Fed raised its policy rate by 25 basis points last week and signalled further increases in the coming months.
St Louis Fed President Alberto Musalem said the US central bank would likely need to raise rates further to bring down inflation driven by strong demand and a commodity price shock extending beyond oil. He added that acting sooner would be preferable to waiting.
Gold is traditionally viewed as a hedge against inflation and geopolitical risks, although higher interest rates can reduce its appeal as investors favour yield-bearing assets.
Elsewhere, spot silver rose 0.3% to US$66.19 per ounce, while platinum gained 0.3% to US$1,792.76 and palladium climbed 0.3% to US$1,305.10.
On the geopolitical front, oil prices rose as markets awaited developments on potential US-Iran talks at the United Nations General Assembly this week.
Reuters
