By Ambar Warrick
Investing.com-- Gold prices rose slightly on Tuesday after seven straight sessions of losses, but remained under pressure as growing expectations of a hawkish Federal Reserve boosted the dollar and treasury yields.
Spot gold rose 0.1% to $1,738.62 an ounce, while gold futures rose 0.2% to $1,751.55 an ounce by 20:39 ET (00:39 GMT). Both instruments dropped for the past seven sessions, as expectations that the Fed will keep raising interest rates at a sharp pace drove traders into the dollar.
The dollar index retreated slightly on Tuesday, but was trading around six-week highs. The greenback was largely underpinned by a series of hawkish comments from Fed officials last week, which suggested that the central bank has no plans to ease its pace of interest rate hikes.
U.S. 10-year Treasury yields jumped over 1% on Monday and were trading at a one-month high.
Focus is now on an upcoming address by Fed Chair Jerome Powell to the Jackson Hole Symposium on Friday, where the chair is expected to dismiss speculation that the Fed intends to pivot to a dovish stance.
Softer-than-expected U.S. inflation data for July had briefly spurred expectations that the Fed will reduce the size of its interest rate hikes from September. But signs of a robust job market, coupled with hawkish comments from Fed members, have offset this expectation.
Traders are now almost evenly split over a 50 basis point and 75 bps hike by the Fed at its next meeting.
Gold has shed most of its gains made this year as the Fed hiked rates four times to curb runaway inflation. The yellow metal has largely underperformed the U.S. inflation rate so far in 2022.
Among industrial metals, copper prices rose slightly on the prospect of more stimulus measures in major importer China.
Copper futures rose 0.2% to $3.6620 a pound.
The People’s Bank of China cut interest rates for a second straight week on Monday, indicating that Beijing is likely to roll out more stimulus measures to support the economy.
A stimulus-driven recovery in Chinese industrial activity could drive copper demand higher, benefiting prices.