Shafaq News / Gold prices hovered near three-month lows as upbeat U.S. economic reports made a strong case for rates being higher, yet traders awaited cues from Federal Reserve Chair Jerome Powell and more economic data for a path ahead on rate-hikes.

Spot gold was little changed at $1,913.82 per ounce by 0120 GMT, close to a three-month low of $1,910 hit on June 23. U.S. gold futures were little changed at $1,924.50.

The dollar index held steady.

U.S. consumer confidence increased in June on labour market optimism, while new single-family home sales rose more than expected in May, leading to expectations that the Fed would need to continue to raise rates to bring inflation down to its 2% target. Gold fell up to 0.6% after the data.

Investors expect a 77% chance of a rate hike in July, with rate cuts seen from March 2024 onwards, per CME’s Fedwatch tool.

High interest rates discourage investing in non-yielding gold.

Investors will keenly watch Thursday’s personal consumption expenditure (PCE) price index data for May, first quarter GDP data, and weekly jobless claims for the week ended June 23. Core-PCE is forecast to stay unchanged at 0.4%.

Fed Chair Powell will speak at a policy panel before the European Central Bank Forum on Central Banking in Sintra at 1330 GMT.

Sources told Reuters on Tuesday that ECB policymakers don’t expect inflation easing enough to pause rate hikes this summer.

(Reuters)