By HY Markets Forex Blog

Gold prices were seen trading higher on Tuesday, but remained below $1,200 as the market focus on further economic reports from the world’s largest economy due to be released, including the US GDP report and consumer confidence.

Gold for immediate delivery gained 0.21% to $1,198.40 per ounce, after rising to $1,207.93 on Friday.

Bullion for February delivery came in at $1,198.30 an ounce on the Comex in New York, while silver for immediate delivery rose 0.3% to $16.5340 an ounce. Spot platinum added 0.5% to $1,210.12 an ounce, while Palladium was flat at $791.55 an ounce. 

The dollar index, which measures the strength of the greenback against a basket of major currencies, rose 0.01% to 88.15 on Tuesday. Assets in the world’s biggest gold-backed exchange-traded fund, SPDR Gold Trust, came in at 720.91 tons on Monday.

Last week, the People’s Bank of China (PBoC) made an unexpected announcement to cut the nation’s interest rate for the first time since 2012 after the Bank of Japan increased its asset purchases under its qualitative and quantitative easing (QQE) program. The European Central Bank also lowered interest rates and offered long-term loans to banks in June.

“Differences in economic fundamentals in the US, Europe, Japan and China have led to policy divergence, a situation we see continuing in the medium term,” Yang Xi, a Hangzhou, China-based analyst at Yongan Futures wrote in a note. “While ongoing stimulus will give precious metals some support, the strength of the dollar will limit any rallies,” he added.

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