Gold Price News: Gold Ticks Higher, Eyes on Central Bank Rates

Gold prices rose on Tuesday to reclaim the $2,400 an ounce level, as the markets looked ahead to interest rate decisions by central banks.

Gold traded in a range of $2,377 to $2,411 an ounce on Tuesday, posting modest gains compared with Monday’s range of $2,374 to $2,401 an ounce.

Prices had started the week in a decidedly subdued mood, compared with the previous week’s volatility when prices pushed above $2,430 an ounce only to crash back down to around $2,350 an ounce by the end of the week.

Prices continued to look range bound for most of Tuesday, but the late afternoon saw prices top the $2,400 an ounce level, rebounding from Monday’s dip.

Euro Area GDP figures for Q2 came in on Tuesday showing an increase of 0.3%, only slightly above expectations of 0.2%. Meanwhile, the US JOLTs job openings figures were released for June showing a slightly larger number than the market had expected.

Neither of these appeared to provide convincing direction for gold, although the market may have attracted renewed buy-side interest after prices fell below the 20-day moving average on July 25.

Elsewhere, the US Fed is set to meet on Wednesday, and while very few expect any immediate changes to the current 5.5% interest rate, there will be interest in picking up any clues about the central bank’s expectations for September through to the end of the year.

The markets appear to be betting on a first rate cut in September and two further cuts before the end of the year, so any changes to that outlook could affect the precious metals markets.

The Bank of England is also set to make an interest rate decision on Thursday this week, with opinions split on whether the bank will make a cut from the existing 5.25% — a rate that it has maintained for the last 11 months.

Lower rates are broadly supportive for gold and silver prices as they reduce the opportunity cost of holding non-yield-bearing assets.