Gold Edges Lower On Profit Taking

Gold prices edged lower on Tuesday as a stronger dollar prompted traders to book some profits after recent sharp gains.

Spot gold eased 0.4 percent to $1,418.67 per ounce while U.S. gold futures were down 0.55 percent at $1,419.05 an ounce.

The U.S. dollar hit a two-week high versus its rivals after the White House struck a two-year deal with Democratic Party leaders in Congress to raise America’s $22tn borrowing limit, dousing fears of a government default later this year.

The dollar’s gains, however, remained capped somewhat as investors await the outcome of policy meetings at the European Central Bank and the U.S. Federal Reserve.

The European Central Bank is meeting on Thursday, with analysts expecting that policy makers will send a clear signal to markets that interest rates will fall even further below zero.

The U.S. Federal Reserve is likely to deliver a 25-basis-point cut in the July 30-31 meeting.

Elsewhere, Bank of Japan (BoJ) Governor Haruhiko Kuroda said in a speech at the International Monetary Fund in Washington on Monday that the central bank would persistently continue with powerful monetary easing to lift inflation toward the 2 percent target. The BoJ holds its policy meeting a day before the Fed decision.

Asian and European stock markets rose today after reports suggested that U.S. and China trade officials are moving closer to a face to face meeting in the coming two weeks.

The White House had hosted U.S. technology companies to discuss economic issues including a possible resumption of sales to Huawei.

The material has been provided by InstaForex Company – www.instaforex.com

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