Gold holds decline as dollar reigns amid concerns over slowdown
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Gold holds decline as dollar reigns amid concerns over slowdown

Gold holds decline as dollar reigns amid concerns over slowdown

Gold’s next move may hinge on the minutes from the Fed’s July meeting

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Gold steadied after the biggest drop in a month as investors flocked to the dollar amid growing signs of an economic slowdown.

Bullion has taken a fresh leg down after rising for four weeks as a gauge of the greenback renewed its ascent. The latest US data showed rapidly cooling manufacturing and slumping homebuilder sentiment, which added to concerns over the risks to global growth following weak figures from China.

The softness in China prompted the nation’s central bank to deliver a surprise cut in interest rates just as the Federal Reserve tightens policy to combat inflation, with both boosting the allure of the US currency while tarnishing gold’s appeal. Worldwide holdings in bullion-backed exchange-traded funds have contracted for the past nine weeks.

Gold’s next move may hinge on the minutes from the Fed’s July meeting, which are scheduled for Wednesday and may offer clues on the size of the next rate hike. Ahead of their release, economist Nouriel Roubini warned that markets expecting a pivot and the Fed cutting rates in 2023 “sounds delusional.”

Spot gold was little changed at $1,778.95 an ounce as of 8.44am in Singapore, after tumbling 1.3 per cent on Monday, the most on a closing basis since July 14. The Bloomberg Dollar Spot Index was steady after climbing 0.7 per cent in the previous session.

Silver, platinum and palladium all edged lower.

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