Gold has posted slight losses in the Tuesday session. In North American trade, the spot price for one ounce of gold is $1297.56, down 0.20% on the day. On the release front, consumer inflation numbers were within expectations. CPI remained pegged at 0.2% and Core CPI edged up to 0.2%, just above the forecast of 0.1%. On Wednesday, the US will release PPI reports and the Federal Reserve is expected to raise interest rates to a range between 1.75% and 2.00%.
History was made in Singapore on Tuesday, as leaders of the U.S and North Korea met for the first time ever. The joint statement put out by leaders was short on details, which could explain the lack of movement from gold on Tuesday. Still, the fact that the two leaders held face-to-face talks and spoke glowingly about the future was a remarkable achievement. President Trump said that President Kim Jong-un had reaffirmed its full commitment to complete denuclearization of North Korea. Although the crucial issue of verification was not addressed, there’s no denying that tensions have significantly eased and that the summit could mark a first step in bringing peace to the Korean peninsula.
All eyes are on the Federal Reserve, which is expected to raise rates by a quarter-point at its policy meeting on Wednesday. The odds of a quarter-point move stand at 96% percent, according to the CME Group. Although a rate hike has been priced in by the markets, such a significant move could boost the dollar, and conversely, weigh on gold prices. Investors are still uncertain whether the Fed will raise rates three or four times in 2018. Fed policymakers seemed divided on this question, and if the rate statement provides any clues, we could see some strong movement in gold prices in the North American session.
