Gold steady after slide below key $1,500 level


WASHINGTON: Gold prices were steady on Tuesday, after skidding below a key level in the previous session following an uptick in risk appetite, with investors awaiting meetings by policymakers later this week for clues on the path forward for interest rate cuts.
Spot gold was little changed at $1,497.07 per ounce at 0640 GMT, slightly above the near one-week low of $1,492.10 hit in the previous session.
Gold fell 1.2% on Monday, below the key level of $1,500 and its biggest daily decline since July 19.
“There is not a lot of conviction in today’s trading session for gold… Investors have gained some more confidence about the growth outlook and that weighs on gold,” said Michael McCarthy, chief market strategist at CMC Markets.
U.S. gold futures dipped 0.3% to $1,507.80 an ounce.
Hopes for additional stimulus are rising after reports that Germany is prepared to increase fiscal spending and People’s Bank of China took steps to lower corporate borrowing costs.
“Gold markets continue to struggle under the weight of positive risk sentiment, but the downside momentum suggests we may be one positive trade headline away from testing $1,490, which could trigger a dash for the exits,” Stephen Innes, managing partner, VM Markets, said in a note.
Meanwhile, the U.S. dollar held near a three-week high as an improvement in appetite for riskier assets lifted yields on U.S. government bonds.
Investors are now focused on minutes from the U.S. Federal Reserve’s July meeting due on Wednesday and the Fed’s Jackson Hole seminar later in the week for clues on monetary policy thinking. Also on their watch list will be a Group of Seven summit this weekend.
Traders see about an 86% chance of a 25 basis-point interest rate cut by the Fed in September.
However, Boston Federal Reserve Bank President Eric Rosengren on Monday signalled no willingness to support further interest rate cuts.
Spot gold may test a support at $1,483 per ounce, a break below which could cause a fall to $1,467, according to Reuters technical analyst Wang Tao.
Elsewhere, silver rose 0.4% to $16.93 per ounce.
Platinum was up 0.3% at $852.78 an ounce, while palladium also climbed up 0.3% to $1,478.27.