Gold rose on Tuesday to recover from its lowest level in nearly six weeks, supported by a softer dollar ahead of a speech later in the day by Federal Reserve Chair Janet Yellen for clues on whether the US will keep raising rates this year.
Fed officials have signaled they will look through a slowdown in inflation and continue on their current trajectory of interest rate hikes. But investors are sceptical and market pricing shows only a 40% chance of a rate hike at the Fed's December meeting, Reuters reported.
Yellen is scheduled to take part in a discussion on global economic issues at London's British Academy. Ahead of that, the dollar slipped 0.5% against major currencies.
Spot gold had risen 0.6% to $1,251.84 per ounce. It dropped to $1,236.46 on Monday, its weakest since May 17. The precious metal slid 1% in the previous session as a large sell order hit sentiment, though losses were limited by political uncertainty around the world.
US gold futures for August delivery rose 0.5% to $1,252.20 an ounce. "Around the time London came in there was some decent buying seen through COMEX. The market consequently sharply rose through $1,247 all the way to $1,252 in a matter of seconds, as stops were tripped," MKS PAMP trader Alex Thorndike said in a note.
Spot gold may drop back toward $1,172 in three months, as suggested by its wave pattern and a Fibonacci retracement analysis, according to Reuters technical analyst Wang Tao.
Among other precious metals, silver rose 0.8% to $16.68 an ounce. Palladium climbed 0.4% to $868.25 per ounce. Platinum rose 1.1% to $922.90 per ounce, recovering from Monday's six-week trough.
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