Gold Rises with Dollar Decline

Gold prices rose today, Tuesday, as the dollar retreated, while traders anticipated a potential increase in interest rates along with indications regarding the monetary policy path from the Federal Reserve over the next two days. Gold climbed 0.3 percent in spot transactions to $1961.13 per ounce by 07:08 GMT. Meanwhile, there was little change in U.S. gold futures, which remained steady at $1962.80. The dollar index dropped from its highest level in nearly two weeks, supporting gold, as a falling dollar makes the metal cheaper for buyers holding other currencies. Market analyst at City Index, Matt Simpson, stated, "After four days of decline, I believe (gold) will remain above $1950 and will seek to correct driven by technical factors towards between $1,960 and $1,965 today. However, we really need to conclude the Federal Open Market Committee meeting to see a significant move." Market focus will be on comments from Federal Reserve Chairman Jerome Powell tomorrow, Wednesday, and European Central Bank President Christine Lagarde on Thursday regarding monetary policy expectations for the September meetings. Gold is very sensitive to rising interest rates as it increases the opportunity cost of holding non-yielding metal. In other precious metals, silver rose 0.6 percent in spot transactions to $24.52 per ounce, platinum increased by nearly 1 percent to $965.55, and palladium jumped 1.6 percent to $1290.63.