Gold prices were little changed early on Tuesday in US trading while market participants seek a new catalyst.
Gold for August delivery on the Comex division of the New York Mercantile Exchange was last up $1.30 or 0.1 percent at $1,156.70 per ounce. The metal is trading in a tight range between $1,151.80 and $1,159.10, highlighting the lack of conviction in the marketplace.
Federal Reserve chair Janet Yellen will give her semi-annual testimony to Congress tomorrow after last week’s hawkish remarks, which indicated a possible interest-rate rise in 2015.
As fears of a Greek exit from the eurozone diminish – but have not entirely disappeared – the timing of the Fed’s first rate rise could remain the focus for investors throughout the rest of 2015.
“Gold continues to hold the $1150 psychological level, which is encouraging, yet the yellow metal remains vulnerable as it sits precariously near recent lows,” Joni Teves, an analyst at UBS, said. “The market awaits fresh catalysts here, with… Yellen’s testimony tomorrow the most likely source of direction for gold in the near-term.”
Some market observershave argued that gold’s supposed safe-haven qualities failed to boost the market even amid the Greek crisis and declining Chinese growth. Its second-quarter GDP growth figure is due later this week – a fall below the key seven-percent level would suggest that Beijing’s efforts to stimulate the economy are falling short.
“The complex continues to do very little, drifting ever lower in very thin, disinterested conditions,” Marex Spectron’s David Govett said in a note.
“Gold has proved that its ‘status’ as a safe haven is non-existent and the [platinum group metals] have shown that their industrial links are the main driver at the moment as they have tumbled on the back of Chinese and European woes,” he added.
Softer oil prices are also weighing after Iran agreed to curb its nuclear programme in return for an easing of sanctions, which will probably result in Iranian oil exports reaching an already oversupplied market, analysts suggested.
In data, US core retail sales in June were down 0.1 percent on May, missing the predicted 0.7 percent and retail sales at -0.3 percent missed the forecast 0.4 percent. The NFIB small business index in June was at 94.1, far below the 98.6 estimate.
Earlier, Chinese M2 money supply at 11.8 percent was better than expected while in Europe the German final CPI came in at -0.1 percent. German ZEW economic sentiment at 29.7 was below expectations, as was the overall eurozone number at 42.7. Industrial production at -0.4 percent also undershot.
In wider markets, Germany’s DAX and France’s CAC-40 were down 0.4 percent and 0.1 percent respectively, while the euro was 0.6 percent stronger at 1.1068 against the dollar.
As for other precious metals, Comex silver for September delivery was last down 7.7 cents at $15.380 per ounce. Trade has ranged from $15.235 to $15.480.
Platinum futures for October delivery were down $2.40 at $1,033.60 per ounce, while the most actively traded palladium contract was at $661.50, up $2.55.
(Editing by Mark Shaw)
The post Gold prices flat, investors keen to hear Yellen’s speech appeared first on The Bullion Desk.
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