Gold edges down

BENGALURU. — Gold prices held steady on Tuesday, supported by market expectations of fewer interest rate hikes in the year by the US Federal Reserve, while a bounce in Chinese equities stoked interest in riskier assets.

Spot gold had edged down about 0,1 percent to $1,289.86 per ounce by 0748 GMT, while US gold futures were 0,1 percent lower at $1,290.50 an ounce.

“We will see market resistance until we see some catalyst that will give some boost to safe-haven assets,” said Kyle Rodda, a market analyst at IG, Australia.

“Markets are sitting on their hands and waiting for more information about the subjects that matter to them.”

Asian stocks recovered on Tuesday after Beijing signalled more supportive measures to stabilise a slowing economy, and emphasised that China is seeking a strong start in the first quarter. Meanwhile, the dollar weakened on heightened expectations the Fed will hold off on raising rates this year due to a slowdown in global growth.

“The Fed had said earlier they would raise interest rates based on data . . . So, the weaker economic data has supported gold prices,” said Brian Lan, managing director at dealer GoldSilver Central in Singapore.

If gold can break the $1,298 level, $1,300 would not be difficult to achieve, Lan added.

Gold tends to gain on expectations of lower interest rates, as they reduce the opportunity cost of holding non-yielding bullion. Lower interest rates also tend to weigh on US yields and the dollar, in which gold is priced. — Reuters.