Gold is becoming more lustrous with the decline of the dollar

Gold rose on Tuesday as the dollar fell, but gains remained limited as traders await Federal Reserve Chairman Jerome Powell’s testimony before Congress later this week to get a clearer picture of the path of interest rates.

Gold spot transactions increased 0.15 percent to $ 1952.98 an ounce by 0926 GMT. But US gold futures fell 0.4 percent to $1,964.10.

Although a weaker dollar should support gold, the precious metal’s gains are likely to remain limited ahead of Powell’s congressional testimony on Wednesday and Thursday, said Peter Fertig, an analyst at Quantitative Commodities Research.

The dollar fell 0.1 percent, making gold cheaper for holders of other currencies.

Dealers expect a 74 percent increase in US interest rates by 25 basis points in July, to a range between 5.25 and 5.50 percent, excluding any rate cuts before the start of 2024, according to CME’s VideoWatch tool.

Higher interest rates increase the opportunity cost of holding non-yielding metal.

As for other precious metals, spot silver fell 0.1 percent to $23.91 an ounce, platinum also fell 0.7 percent to $969.04, and palladium fell 0.7 percent to $1,396.35.