Gold ticks higher as dollar dips; wider rate-hike narrative in focus

Gold prices edged up on Tuesday as the dollar eased, even as investors kept a keen eye on posturing from major central banks on interest rate hikes for a clearer outlook for bullion.

FUNDAMENTALS

* Spot gold was up 0.2% at $1,841.01 per ounce as of 0047 GMT. U.S. gold futures firmed 0.1% to $1,843.10.

* The dollar weakened slightly, making greenback-priced bullion more attractive for buyers holding other currencies.

* However, benchmark U.S. 10-year Treasury yields

rose, making bullion less appealing, after U.S. stock and bond markets were shut on Monday for the Juneteenth holiday.

* Gold traded in a tight range on Monday as an easing dollar and economic worries countered concerns around aggressive monetary tightening by the Federal Reserve.

* The U.S. central bank could raise interest rates swiftly this year and forge a “stellar” economy ahead if it can pull off a repeat of the success of the central bank’s 1994 tightening cycle, St. Louis Fed President James Bullard said on Monday.

* A series of surprise actions by some of the world’s largest central banks fretting about runaway inflation has left bond investors battered. Now, a growing chorus of investors is calling on policymakers to move fast to end the uncertainty.

* Although bullion is often seen as an inflation hedge, higher interest rates and bond yields increase the opportunity cost of holding gold, which yields nothing.

* The European Central Bank will not revisit its decision to raise interest rates by 25 basis points at its July 21 meeting but the size of its September hike is still to be decided, ECB Chief Economist Philip Lane said on Monday.

* Spot silver was up 0.4% at $21.67 per ounce, platinum edged 0.1% up to $932.58, and palladium gained 0.8% to $1,861.94.

DATA/EVENTS (GMT)

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