Jan 10 (Reuters) – Gold moved higher on Tuesday as traders wait for US Federal Reserve Chairman Jerome Powell to clarify the central bank’s plans on the pace of rate hikes.
The spot price of gold rose 0.16% to $1,874.51 per troy ounce as of 1:41 pm Moscow time.
The Fed head will speak at a central bank conference at 5pm Moscow time.
Gold has remained positive since November and a break above $1,880 an ounce – supported by possible dovish comments from Powell – could help the precious metal meet resistance at the all-important $1,915-1,920 level, said Carlo Alberto De Kaza of Kinesis Money.
Prices hit their highest level since early May on Monday as gold cleared the key $1,900 mark. The precious metal is up over $250 from its September lows as the US central bank is expected to slow the pace of interest rate hikes.
Traders are increasingly betting on 25 basis point hikes at the first two Fed meetings in 2023, and that is the main reason for gold’s spectacular recovery, De Caza added.
Higher interest rates reduce the attractiveness of gold as an inflation hedge and increase the opportunity cost of owning this non-income producing asset.
The US dollar moved higher, reducing appetite for gold among investors who hold other currencies.
“However, the market is expecting a surprise in the form of a lower US CPI (Thursday) to support expectations for a less aggressive rate hike, and this could lead to higher gold prices,” said Yeap Jun Rong by IG Market.
Palladium rose 0.35% to $1,780.39 an ounce, while silver fell 0.37% to $23.54 an ounce. The price of platinum fell 0.34% to $1.075.
The original message in English is available at code: (Arundhati Sarkar and Ashita Shivaprasad in Bangalore)
