Gold Prices Increase as Investors Eye Powell's Testimony

Gold prices increased slightly on Tuesday (July 9), as investors awaited Federal Reserve Chair Jerome Powell’s testimony and June inflation data to determine the US central bank's next policy move. As of 0112 GMT, spot gold had risen by 0.2% to $2,364.03 per ounce, following a decline of over 1% on Monday. US gold futures also saw a 0.3% rise to $2,369.70.

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Jerome Powell's testimony before the Senate on Tuesday and the House on Wednesday could provide investors with further insights into the Fed’s future interest rate decisions.

Data from CME’s FedWatch Tool indicates a 77% probability of a rate cut in September by the Fed. Lower interest rates decrease the opportunity cost of holding non-yielding bullion.

A report from the Federal Reserve Bank of New York, released on Monday, indicated that inflation expectations for the US softened in June, with reduced projections for price increases across various consumer goods and services.

Attention is also on the June consumer and producer price indexes, which are set to be released on Thursday and Friday, respectively.

Gold prices surged by over 1% on Friday after a jobs report revealed a slowdown in the US labor market, with the unemployment rate rising to 4.1%. Spot silver increased by 0.4% to $30.90, platinum rose by 1% to $1,006.20, and palladium saw a gain of 0.6% to $1,015.48.

On Monday, July 8, gold prices dipped slightly but remained close to the more than one-month high achieved in the prior session. This followed weaker US economic data, which bolstered expectations of a Federal Reserve interest rate cut in September.

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In India, gold prices fell on Monday, July 8, after several days of increases, offering some relief to buyers. Simultaneously, US gold prices declined on July 8 but stayed near a more than one-month high, driven by the anticipation of a Fed rate cut in September due to softer US economic data.