Gold prices inch higher as dollar cools ahead of Powell speech

Gold prices inched higher on Tuesday, as the dollar took a breather amid ongoing signs from Fed members that a December rate cut remains on the table.

Spot gold rose 0.1% to $2,642.38 an ounce, while gold futures expiring in February rose 0.2% to $2,664.54 an ounce by 3:33 p.m. ET (20:33 GMT).  Gold inches higher as dollar rally cools ahead of Powell speech, payrolls data 

The dollar took a breather on Tuesday as fed speakers continued to signal that December rate cut remains in play. 

Chicago Federal Reserve President Austan Goolsbee on Tuesday said he sees interest rates needing to come down a "fair amount" over the next year as rates remain in restrictive policy. 

Federal Reserve Governor Christopher Waller said Monday he was leaning toward supporting an interest rate cut at the December meeting amid expectations for inflation to continue to slow toward the central bank's 2% target. 

The slew of remarks from Fed officials  come ahead of Chair Jerome Powell 's speech on Wednesday. His address comes just weeks before the Fed’s final meeting for the year, where the central bank is widely expected to cut rates by 25 basis points.

Nonfarm payrolls data for November is due this Friday and is widely expected to factor into the Fed’s outlook on rates. Investors are bracing for a potentially strong reading, as the impact of recent hurricane-related disruptions clears. 

The long term outlook for rates was also clouded by uncertainty over the Trump administration. Trump is widely expected to enact expansionary and protectionist policies, which could underpin interest rates and inflation. 

Higher rates bode poorly for gold and other precious metals, given that they increase the opportunity cost of investing in non-yielding assets. 

Other precious metal were up on Tuesday. Platinum futures gained 0.9% to $958.50 an ounce, while silver futures rose 2.2% to $31.527 an ounce.

Among industrial metals, copper prices retreated on the prospect of more trade and economic headwinds for top importer China. The U.S. imposed stricter controls on the supply of chipmaking technology to China this week. 

Benchmark copper futures on the London Metal Exchange rose 1.3% to $9,125 a ton, while February copper futures advanced by 1.7% to $4.2010 a pound. 

Copper took some support from positive business activity readings from China, which showed recent stimulus measures from Beijing were bearing some fruit.

But traders were holding out for more cues on China from two key political meetings in December. 

Worsening trade relations between the U.S. and China are also expected to potentially dent China’s economy, hurting its appetite for copper.

(Ambar Warrick contributed to this article)

Source: Investing.com