Gold moves further above $1,900 support, more Fed cues awaited

investing.com:

Investing.com-- Gold prices steadied further above key support levels on Tuesday, but the yellow metal still remained under pressure as markets awaited more cues on monetary policy from the Federal Reserve this week.

Bullion prices saw some relief over the past two sessions, after the Fed’s preferred inflation gauge read lower than expected for May. But the central bank is still expected to hike rates in July.

Substantially weaker-than-expected U.S. manufacturing data also ramped up fears of slowing growth, spurring some flows into gold.

But despite recent gains, gold was still trading close to its weakest level in nearly four months. Spot gold was flat at $1,920.91 an ounce, while gold futures steadied at $1,928.55 an ounce by 20:26 ET (00:26 GMT).

Markets remained largely wary of gold ahead of more cues on the Fed this week, starting with the minutes of the central bank’s June meeting, due on Wednesday. While the bank had kept rates steady, it had also flagged at least two more hikes this year.

Rising interest rates bode poorly for gold, given that they increase the opportunity cost of holding the yellow metal.

Nonfarm payrolls data for June is also due on Friday, and is expected to factor into the Fed’s rate decision later in the month. 

Markets are pricing in an 88% chance that the Fed will raise rates by 25 basis points in July, given that inflation is still trending well above the central bank’s target range. The prospect of high rates weighed heavily on gold over the past two months, and is expected to limit any major recovery in the yellow metal this year. 

Other precious metals were also muted this week. Platinum rose 0.2%, while silver futures were flat.

Among industrial metals, copper prices marked a strong