Gold slips as dollar firms, Jerome Powell speech eyed for cues on rates
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Gold prices eased to a near one-week low on Tuesday as the dollar firmed and safe-haven demand slowed, while investors awaited comments from Federal Reserve officials, including Chair Jerome Powell, for more clarity on the interest rate outlook.
Spot gold was down 0.2% at $1,972.89 per ounce by 0328 GMT. U.S. gold futures fell 0.5% to $1,979.50.
The dollar rose 0.1% after hitting a six-week low in the previous session, making gold more expensive for other currency holders. [USD/]
"At the moment it's really still a story about geopolitical risk, and the margins of risks would seem to have diminished a little bit in gold and prices are reflecting that," said Kyle Rodda, financial market analyst at Capital.com.
Prime Minister Benjamin Netanyahu said Israel would consider "tactical little pauses" in Gaza fighting to facilitate the entry of aid or the exit of hostages, but again rejected calls for a general ceasefire despite growing international pressure.
Meanwhile, investors grew more confident that the Fed may be done with its rate hikes following a soft U.S. October non-farm payrolls data last week.
However, Fed Bank of Minneapolis President Neel Kashkari said that the central bank likely has more work ahead of it to control inflation.
"The things that could drive volatility is the speech from Powell. Also the treasury auctions over the next couple of days and if we see some sort of tepid demand... that could put upward pressure on yields again, and put some downside pressure on gold," Rodda added. [US/]
Investors will now be waiting to see if Powell, who is due to speak on Wednesday and Thursday, maintains the more dovish tone he struck after the Fed's meeting last week.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.50% to 867.57 tonnes on Monday. [GOL/ETF]
