Gold futures settled higher on Tuesday on safe-haven demand amid worries about an economic slowdown and geopolitical concerns.
Data showed on Monday that the U.S. services sector barely grew in May and new orders for manufactured goods rose by slightly less than expected in April, rekindling concerns about inflation and a potential recession.
German factory orders data as well as Eurozone and British retail sales figures all disappointed today – denting appetite for riskier assets.
News about the destruction of a major dam and power station in Ukraine, and the resultant major flooding in the region raised concerns about damage to crops and food. The Russians and the Ukrainians are blaming each other for the destruction of the dam.
The dollar’s rise limited gold’s upside. The dollar index surged to 104.37 and despite easing to 104.19, remains positive with a gain of about 0.18%.
Gold futures for August ended higher by $7.20 or about 0.4% at $1,981.50 an ounce.
Silver futures for July ended up $0.035 at $23.670 an ounce, while Copper futures for July settled at $3.7685 per pound, gaining $0.005.
Traders continue to look ahead to the Federal Reserve’s monetary policy decision next week. The Fed is widely expected to pause its recent series of interest rate hikes.
Key inflation data is also due next week. The data could impact whether the Fed resumes its rate hikes next month.
CME Group’s FedWatch Tool is currently indicating a 79.4% chance the Fed will leave rates unchanged next week but a 52.7% chance of another quarter point increase in July.
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