Gold hovers near its 3-month peak, focus turns to Powell’s testimony

Gold hovered near its highest level in three months on Tuesday, supported by weak spending on manufacturing and construction industries in the United States, while investors awaited the testimony of Federal Reserve Chairman Jerome Powell and key jobs data scheduled for release this week.

According to Reuters, gold fell in spot transactions by 0.1% to $2,112.39 per ounce by 0230 GMT, but it hovered near Monday’s levels of $2,119.69, which is its highest level since December 4. US gold contracts fell 0.3% to $2,120.50.

The London Bullion Market Association said the London gold price index reached an all-time high of $2,098.05 per ounce at an auction on Monday afternoon, surpassing the previous record of $2,078.40 set on December 28.

The market’s focus is on US Federal Reserve Chairman Powell’s testimony before Congress on Wednesday and Thursday.

Other economic data is expected this week that may help determine the direction of US interest rate cut expectations, including services data from the Institute for Supply Management at 1500 GMT, the Job Opportunities and Labor Turnover survey on Wednesday, and the non-farm payrolls report on Friday.

Data last week showed US manufacturing declined further in February and inflation gradually eased, while consumer sentiment remained weak.

Atlanta Federal Reserve Bank President Raphael Bostic said on Monday that the Federal Reserve is not under urgent pressure to cut interest rates in light of the “booming” economy and labor market, in comments that highlighted the risk that inflation will remain above the central bank’s 2 percent target or rise by more. Through “repressed exuberance.”

Traders now see a 65% chance of a cut in US interest rates in June, according to LSEG’s interest rate forecasting app.

Lower interest rates would increase the demand for buying bullion that does not generate returns.

As for other precious currencies, platinum fell 0.7% to $890.90 an ounce, and palladium fell nearly one percent to $951.12. Silver fell 0.9 percent to $23.68.