Gold slightly rises on anticipated Fed’s interest rate hike

Gold prices rose on Tuesday amid weak trading due to the US Independence Day holiday, but the rise in the dollar limited gains at a time when traders await more economic data later in the week in search of indications about the Federal Reserve’s intentions regarding raising interest rates in the future.

Spot gold prices rose 0.2 percent to $1925.56 an ounce by 0623 GMT. US gold futures rose by a similar rate, to $1,932.30.

Trading volume may be modest due to the American holiday.

Investors expect there is about a 90 percent chance of a July rate hike of 25 basis points, according to the Federal Reserve Monitor at the Chicago Mercantile Exchange, which would raise interest rates to between 5.25 and 5.50 percent before an expected cut in May 2024. High interest rates reduce investments in gold, which does not yield a return.

And the dollar index rose 0.1 percent, which curbed the rise in bullion prices, given that the rise in the dollar makes gold more expensive for holders of other currencies.

With regard to other precious metals, spot silver rose 0.3 percent to $22.96 an ounce, platinum jumped 1.1 percent to $916.42, and palladium jumped 2.1 percent to $1,254.44.