Gold prices rose on Tuesday as the U.S. dollar and Treasury yields showed little momentum, while investors anticipated significant inflation data and remarks from Federal Reserve officials later in the week.
Spot gold strengthened by 0.3% to $2,035.92 per ounce as of 9:35 a.m. ET (1435 GMT).
Meanwhile, U.S. gold futures saw a 0.3% increase, reaching $2,044.10 per ounce.
The dollar index (.DXY) remained subdued, and the benchmark 10-year Treasury yield declined, rendering bullion more appealing for international buyers.
“A slight uptick in inflation data will pressure the gold market but it is well supported at the $2,000 level by central bank buying.
It is unlikely Fed officials will change their stance until more data,” remarked Phillip Streible, chief market strategist at Blue Line Futures, based in Chicago. “Gold will have a record run in the fourth quarter when rate cuts materialise.”
At least 10 Fed officials are scheduled to deliver speeches this week, coinciding with the release of the core personal consumption expenditures price index on Thursday, which is the Fed’s favoured measure of inflation.
Recent statements from Fed policymakers indicate that the U.S. central bank is not in a hurry to implement rate cuts.
Prices are also buoyed by China’s middle class seeking to safeguard their declining wealth due to the property market crisis and an extended stock market downturn, according to Ole Hansen, Saxo Bank’s head of commodity strategy.
Official data revealed that China’s net gold imports via Hong Kong in January reached their highest level since mid-2018.
Spot platinum surged by 1.4% to $892.05 per ounce, despite being down over 9% year-to-date. Palladium also saw an increase of 1.1%, reaching $961.51, although it has experienced a 12% decrease for the year.
“The low price level of platinum and palladium is already leaving its mark on producers of platinum group metals who are likely to reduce their production in response.
This should help to stabilise prices,” stated Commerzbank in a note.