Gold futures early Tuesday in New York were trading firmly above a psychologically important level at $1,300, shaking off gains in global stock markets and a dollar that was inching up.
Bullion’s ascent comes as markets await the start of a two-day policy meeting of Federal Reserve policy makers, commencing later Tuesday, that is likely to signal a central bank that appears inclined to dial back a seemingly aggressive path of rate increases— a potentially bullish development for precious metal prices that don’t offer a yield.
Read: Fed to stress patience and that means no interest-rate move until at least June
Gold for February delivery GCG9, +0.35% on Comex, was up $5.60, or 0.4%, at $1,308.70 an ounce after finishing up 0.4% for a second straight gain on Monday. A settlement at its current level would mark the highest for the most-active gold contract since May 14, according to FactSet data.
“Gold took some time but it finally broke away from $1,300 as a dovish Fed and global growth concerns continue to be the dominant narrative on Wall Street,” wrote Edward Moya, market analyst at Oanda, in a Tuesday research note.
The Fed has penciled in two quarter-point rate increases this year, down from an early estimate of three, although officials have stressed the moves aren’t set in stone. So far in 2019, after the December market turmoil, many Fed officials have emphasized that the central bank intends on being “patient” in its policy normalization plans. That could create a felicitous atmosphere for gold and other precious metals to clamber higher, commodity experts have said.
Meanwhile, March silver SIH9, +0.73% added 10 cents, or 0.7%, at $15.870 an ounce.
The U.S. dollar, which influences gold prices because the commodity tends to be priced in the currency, was holding steady. As measured by the ICE U.S. Dollar Index DXY, -0.02% a gauge of the buck against a half-dozen monetary units, the dollar was little changed at 95.764 on Tuesday.
Meanwhile, global stocks were tilting higher, best reflected in gains in the futures for the Dow Jones Industrial Average YMH9, +0.22% and the S&P 500 index ESH9, +0.09%
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