Gold Prices Hold Steady Near 6-Week Highs
Investing.com - Gold prices held steady near six-week highs on Tuesday, as sentiment on the greenback remained vulnerable amid ongoing concerns over the pace of future U.S. rate hikes and uncertainty regarding a potential U.S. tax overhaul.Comex gold futures little changed at $1,295.10 a troy ounce by 08:05 a.m. ET (12:05 GMT), just off the previous session's six-week peak of $1,299.00.
Sentiment on the greenback remained vulnerable after last week's minutes of the Federal Reserve’s November meeting showed that some officials were concerned inflation would stay below the bank's 2% target for longer than expected.
Investors were also eyeing a confirmation hearing on Tuesday for Fed chair nominee Jerome Powell, with hopes he may give some clues on future policy decisions.
In remarks prepared for the hearing released on Monday, Powell said: "We expect interest rates to rise somewhat further and the size of our balance sheet to gradually shrink".
Market participants also continued to focus on a potential U.S. tax reform plan. President Donald Trump was set to meet Senate Republicans on Tuesday to discuss the party's efforts to pass tax reform legislation.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.15% at 92.99, still close to Monday's nine-week lows of 92.43.
Gold is sensitive to moves in both U.S. rates and the dollar. A weaker dollar makes gold less expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion.
Elsewhere on the Comex, silver futures were up 0.29% at $17.07 a troy ounce.