Gold rose on Tuesday, extending a rally driven by the U.S. Treasury’s recent buyback announcement, while focus shifted to key U.S. inflation data and a speech later this week by Federal Reserve Chair Kevin Warsh for clues on interest rates.
FUNDAMENTALS
Spot gold was up 0.6% at $4,676.75 per ounce, as of 0026 GMT, after hitting its highest since May 14 earlier in the session. U.S. gold futures rose 0.8% to $4,734.50. * Prices rose sharply last week after the U.S. Treasury Department said it would double the size of liquidity support buyback operations for longer-dated notes and bonds.The U.S. Personal Consumption Expenditures report, the Fed’s preferred inflation gauge, is due on Wednesday.
Fed Chairman Warsh’s debut speech at the annual Jackson Hole conference this week has taken on added weight as traders and analysts look for guidance about the recent jump in bond yields and for reassurance of his independence from the Trump administration.
Citi raised its zero-to-three-month gold price target on Monday to $4,800 an ounce and said the rally still had room to run. It kept its six-to-12-month target at $5,000, citing an eventual easing of tensions around the Strait of Hormuz, lower real interest rates and a less hawkish Fed.
The U.S. unveiled an expansion of sanctions that it said would cut off Iran’s economic lifeline but stopped short of the most punishing measures, instead putting the world on notice to cease doing business with the Islamic Republic.
Elsewhere, Ghana’s artisanal gold marketing agency GoldBod has not provided funds to its gold suppliers for as long as three weeks, forcing some operators to halt purchases or borrow to stay in business, five industry sources told Reuters.
Among other metals, spot silver gained 0.5% to $69.29 per ounce, platinum rose 0.3% to $1,880.78 and palladium firmed 0.2% to $1,359.14.
