Gold Inches Higher On Bets For Less Aggressive Fed

Gold prices were seeing modest gains on Tuesday, as the dollar stuck near a nine-month low versus the euro on bets the Federal Reserve will slow the pace of interest rate rises going ahead.

Spot gold edged up 0.2 percent to $1,934.90 per ounce, while U.S. gold futures were up 0.4 percent at $1,936.05.

Several Fed officials indicated in recent sessions that the U.S. central bank was making progress in its inflation fight and they were supportive of slowing the pace of rate rises to a more traditional quarter percentage point at the next policy meeting.

U.S. Treasury Secretary Janet Yellen said she’s encouraged by a strong labor market and progress on inflation over the past six months.

Improving prospects for demand in top consumer China also resulted in a weakening dollar and made bullion cheaper for many buyers.

In economic releases, the euro zone economy swung to expansion in January, a purchasing managers survey showed earlier today, adding to signs that the region could face a milder-than-expected downturn this winter.

Across the Atlantic, reports on durable goods orders, fourth quarter GDP, new home sales and personal income and spending due this week could shed further light on the health of the world’s largest economy.