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Gold rose on Tuesday after a top Federal Reserve official quelled expectations of a US interest rate hike next week.
The Fed should avoid removing support for the US economy too quickly, Board Governor Lael Brainard had said on Monday in comments that solidified the view the central bank would leave rates unchanged next week.
“The comments balance hawkish views by other Fed officials and gold is moving on that,” said Yuichi Ikemizu, head of commodity trading at Standard Bank in Tokyo.
“It is still the same story of a $1,300-$1,400 range for gold. I don't think we are going to see any major move until the Fed meeting next week.”
Spot gold was up about 0.3 per cent at $1,330.41 an ounce by 0335 GMT. US gold futures were up 0.7 per cent at $1,334.50 an ounce.
September rate hike
Traders trimmed their odds for a September rate hike to 15 per cent from 24 per cent on Friday, according to CME Group.
The dollar was on the defensive on Tuesday as markets remained hostage to seesawing speculation on the outlook for US rates.
Against the yen, the dollar slid to 101.72 yen from Monday’s high of 102.82 yen.
“We are now in the Federal Reserve blackout period leading into next week’s Fed meeting and it is looking increasingly likely that we won't see the committee move on rates this month,” said MKS PAMP Group Trader Sam Laughlin.
“The overnight dovish comments out of the Federal Reserve are giving the precious metals a boost and keeping the dollar in check for now. Gold should see support broadly between $1,320- $1,325, while resistance sits toward $1,340.”
Asian stocks rose early on Tuesday, buoyed as Wall Street rallied overnight.
Spot gold may end its current bounce around resistance at $1,330 per ounce, and then resume its downtrend, according to Reuters technical analyst Wang Tao.
Spot silver climbed 0.8 per cent to $19.21 an ounce, after hitting an over one-week low of $18.69 in the previous session.
Platinum was up 0.3 per cent at $1,056.80, having marked its lowest in more than two months at $1,033.45 on Monday.
Palladium rose 0.8 per cent to $665.80. It had touched a low of $650.15 Monday, a level not seen since July 20.
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