· Gold rose slightly on Wednesday as the dollar dipped following remarks from the International Monetary Fund on the U.S. currency.
· Spot gold traded 0.3% higher at $1,410.06 per ounce. U.S. gold futures climbed just 0.9% to $1,423.30.
· The dollar index, which tracks the greenback’s performance against six other currencies, fell 0.1% after the IMF said the U.S. currency is overvalued by 6% to 12%, based on near-term economic fundamentals.
· The IMF’s comment is likely to give President Donald Trump more fodder for his frequent complaints that dollar strength is hampering U.S. exports.
· Earlier in the day, gold had traded slightly lower as stronger economic data from the previous session dampened hope for a rate cut later this month.
· Chicago Fed President Charles Evans, meanwhile, said on Tuesday that an interest rate cut of a half a percentage point at the U.S. central bank’s July 30-31 policy meeting could mean that the Fed’s inflation goal is reached sooner.
· Investors now await the Fed’s ‘Beige Book’ later in the day for insight on how trade tensions are affecting the business outlook.
· Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding bullion. They also boost the dollar, in which the metal is priced.
· In the latest on the trade row, Trump said on Tuesday the United States still has a long way to go to conclude a deal with China but could impose tariffs on an additional $325 billion worth of Chinese goods if needed.
· “Gold remains locked within the $1,400 - $1,420 range, while more broadly we look for a move outside of $1,380 - $1,440 for medium-term direction,” trading firm MKS PAMP said in a note.
· Meanwhile, silver held steady at $15.56 an ounce, extending gains for a fourth straight session. It hovered close to a more than four-month high of $15.69.
Reference: CNBC, Market Watch
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