(Bloomberg) -- Gold is holding near an 11-month low as traders assess the outlook for further monetary policy tightening and the impact on global growth.
Bullion is hovering above the $1,700 an ounce level as it continues be pressured by the strength in the US dollar, which is a sign of prevailing caution in global markets. Still, a gauge of the greenback has since retreated from a record hit last week.
Investors are awaiting the Federal Reserve’s meeting on July 26-27 for a steer on how aggressive the central bank will be in raising interest rates to tackle searing inflation. The latest US data reinforce policy makers’ support for another 75-basis-point hike, Bloomberg Economics says.
“The Fed might not need to tighten policy as aggressively as markets were initially thinking, but the rate-hiking cycle could last into early next year,” said Edward Moya, senior market analyst at Oanda Corp. “The dollar is weakening to start the trading week, but this might not be the top, which means gold might struggle to make a move above anywhere close to the $1,750 level.”
Spot gold slipped 0.2% to $1,706.63 an ounce at 8:22 a.m. in Singapore. Prices dipped below $1,700 last week for the first time since August. The Bloomberg Dollar Spot Index was little changed after dropping 0.4% in the previous session. Silver and palladium were little changed, while platinum fell.
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