Gold prices rose on Tuesday during European trading, reaching six-week highs as the dollar weakened against a basket of major currencies.
Last week’s grim US economic data increased the likelihood of two Federal Reserve interest rate cuts this year.
Investors are now eagerly awaiting Fed Chair Jerome Powell’s Congressional testimony later today to understand the future direction of US monetary policy.
Prices
Gold prices increased by 0.4% to $2,368 an ounce, with a session low of $2,358.
On Monday, gold prices fell by 1.4%, marking the first loss in four days due to profit-taking from six-week highs of $2,392.
The Dollar
The dollar index fell by 0.1% on Tuesday, resuming its decline and nearing three-week lows against a basket of major currencies.
US Rates
Negative US data last week revealed the services sector shrank for the first time since January 2023.
As a result, the probability of a Fed rate cut in September increased to 78%, and to 87% in November.
Powell’s Testimony
Fed Chair Jerome Powell is set to testify before Congress this week regarding monetary policies and interest rates.
Powell stated last week that while the Fed has made significant progress in addressing inflation, more confidence is needed before considering rate cuts.
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