Wednesday 07 Jun 2023
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LONDON/SINGAPORE (June 2): Gold edged higher on Tuesday, in response to losses in the dollar after disappointing U.S. data and also as uncertainty persisted over whether a high-level meeting on Greece's debt crisis might lead to a significant breakthrough.

Spot gold rose 0.3 percent to $1,193.03 an ounce by 1435 GMT, while U.S. gold futures for August delivery rose $5.00 to $1,193.30 an ounce.

It had climbed above $1,200 for the first time in a week in the previous session but failed to hold its gains on mixed U.S. economic data, which kept alive expectations the Fed will raise rates later this year from record lows. Higher rates would reduce demand for non-interest-paying bullion.

The dollar was down 1.4 percent against a basket of currencies, mostly on euro gains after better-than-expected euro zone inflation data.

"The euro and the dollar are dictating this trade but we really need to break below $1,175 or above $1,215 for the metal to enter a new trading range," MKS SA head of trading Afshin Nabavi said.

The dollar was also weighed down by U.S. data on Tuesday showing new orders for factory goods fell unexpectedly in April.

More U.S. economic data, culminating in the monthly non-farm payrolls report on Friday, will be watched by investors for clues on the timing of a rate rise.

"People are still expecting a U.S. rate hike by the end of the year and then when you have weaker data then it tends to cause a little bit of panic on whether it will be a December rate hike or not," Citi strategist David Wilson said.

Bullion traders were also looking for news on the Greek debt crisis. The metal is usually seen as a hedge against political and financial risk, although the impact on demand from wider political concerns is usually short lived.

Athens and its creditors from the euro zone countries and the International Monetary Fund are racing to hammer out a deal that would prevent the country from defaulting and potentially leaving the euro zone.

In a reflection of bearish investor sentiment, holdings in SPDR Gold Trust, the top gold-backed exchange-traded fund, fell to their lowest since mid-Jan at 714.07 tonnes on Monday.

After a five-day losing streak, spot platinum was up 0.8 percent at $1,111.19 an ounce, still close to its lowest in nearly 11 weeks. It was trading at the cheapest to gold since January 2013, with a $90 an ounce discount to the yellow metal.

Silver rose 0.4 percent to $16.77 an ounce, while palladium was down 0.1 percent at $769.22 an ounce.

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