Gold prices rose for a second straight day on Tuesday, but the precious metal traded within a relatively tight range, due to investor caution ahead of the Fed’s two-day policy meeting.
“Given the enthusiasm for risk and growth exposed assets, we could see pressure come to gold during the session, but on the other hand the weaker U.S. dollar is supportive,” Michael McCarthy, chief strategist at CMC Markets, said.
Yet, Gold gains may turn out to be limited as investors still favored riskier assets. Following a recovery optimism-driven green wave across US stock exchanges on Monday, Asian shares also closed higher on Tuesday. Hang Seng went up 1.13%, Shanghai SE Composite – 0.62%, while Australia’s ASX closed 2.39% higher.
As of 9:40 GMT on Tuesday Spot Gold was gaining 0.55% to trade at $1,707.65 per troy ounce, after earlier touching an intraday high of $1,709.86, or a price level not seen since June 5th ($1,716.88). Meanwhile, Gold futures for delivery in August were gaining 0.53% on the day to trade at $1,714.15 per troy ounce, while Silver futures for delivery in July were down 0.31% to trade at $17.837 per troy ounce.
The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was gaining 0.22% on Tuesday to 96.91, after earlier climbing as high as 97.06, or a level not far from Monday’s high.
In light of Friday’s upbeat Non-farm Payrolls report, on Tuesday Gold traders will be paying attention to US job openings data for April. The number of job openings in the country probably decreased to 5.750 million in April, according to market expectations, from 6.191 million in March. The official report is due out at 14:00 GMT.
Meanwhile, the Federal Reserve Bank commences its two-day policy meeting on Tuesday and market players will be looking for any forward guidance, after recent macro data suggested US economy had gradually begun to recover.
There has been a slight change in near-term investor interest rate expectations. According to CME’s FedWatch Tool, as of June 9th, investors saw an 83.6% chance of the Federal Reserve keeping borrowing costs at the current 0%-0.25% level, compared with an 87.1% probability on June 8th.
As for the bank’s meeting in July, the chance of interest rates being left intact is seen at 83.9% on Tuesday, compared with an 87.1% probability a day ago.
Futures data also showed market players no longer priced in the possibility of rates being taken below zero.
Daily Pivot Levels (traditional method of calculation)
Central Pivot – $1,692.10
R1 – $1,706.69
R2 – $1,715.09
R3 – $1,729.68
R4 – $1,744.27
S1 – $1,683.70
S2 – $1,669.11
S3 – $1,660.72
S4 – $1,652.32
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
