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Gold Up as Dollar Weakens, Investors Await Fed Minutes

Published 07/05/2021, 11:42 PM
Updated 07/05/2021, 11:51 PM
© Reuters.

By Gina Lee – Gold was up on Tuesday morning in Asia and was close to a two-week high. A weaker dollar also gave the yellow metal a boost and investors await the release of the minutes from the U.S. Federal Reserve’s latest policy meeting.

Gold futures rose 0.80% to $1,797.65 by 11:34 PM ET (3:34 AM GMT) after hitting its highest since June 18 at $1,794.86 on Friday. The dollar, which usually moves inversely to gold, was down on Tuesday morning after hitting a three-month high at the end of the previous week.

U.S. markets were closed on Monday for a holiday.

Investors remain focused on the minutes from the Fed’s June meeting, due on Wednesday, for further clues about the central bank’s surprise hawkish stance in the policy decision handed down after that meeting. They also await the Reserve Bank of Australia’s policy decision, due to be released later in the day.

On the data front, Japan’s household spending grew 11.6% year-on-year in May, which was higher than the 10.9% growth in forecasts prepared by but lower than April’s 13% growth. It contracted by 2.1% month-on-month.

In Europe, the Markit composite purchasing managers' index (PMI) for June was 59.5, while the services PMI was 58.3. Both PMIs were higher than expected, with businesses in the area expanding at the fastest pace in 15 years.

Across the Atlantic, the U.S. Institute of Supply Management (ISM) non-manufacturing PMI for June is also due later in the day.

Global shares remained close to record highs on Monday, boosted both by the European data and the latest U.S. jobs report released on Friday. However, concerns about the Delta variant of COVID-19 remain.

Meanwhile, the Postal Savings Bank of China suspended new openings for accounts to trade in the spot precious metals market due to price fluctuations and elevated trading risks.

In other precious metals, silver inched down 0.1% while palladium gained 0.3% and platinum rose 0.5%.

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