Investing.com – Gold prices held slightly weaker in early Asia on Tuesday with the focus on China’s continued slump and as investors mull the prospect of a Federal Reserve rate hike later this year instead of September.
On the Comex division of the New York Mercantile Exchange, gold for December delivery eased 0.08% to $1,084.70 a troy ounce.
Silver for September delivery fell 0.21% to $14.450 a troy ounce.
for September delivery dipped 0.14% to $2.342 a pound.
Overnight, inched down on Monday amid a stronger dollar, even as muted inflation data for the month of June provided support to dovish arguments for a delayed interest rate hike by the Federal Reserve.
On Monday morning, the U.S. Department of Commerce’s Bureau of Economic Analysis said consumer spending increased by 0.2% in June in line with analysts expectations, while personal income rose by 0.4% — slightly higher than consensus estimates. Analysts forecast a 0.3% rise in incomes for the month.
More critically the Core PCE Index, which strips out food and energy prices, inched up 0.3% for the month, up from a 0.2% increase for May. On a year-over-year basis, however, the gains were muted as the index only increased by 1.3%. At its July FOMC meeting last week, the Fed reiterated that inflation remains below its targeted goal of 2% over the medium term, commonly defined as a period of the next one to two years.
The reading will likely bolster dovish viewpoints on the Fed for a delayed interest rate hike beyond this fall. Gold, which is not attached to dividends or interest rates, struggles to compete with high-yield bearing assets in periods of rising rates.
Elsewhere, Gallup said in its monthly U.S. Consumer Spending Measure that self-reports from American consumers on a monthly basis averaged approximately $91 for July, up one dollar from its level in June. While the figure is slightly lower than its level from July, 2014, it is also higher than any other reading for the month since 2009. Over the last several months, consumer spending has remained relatively flat, according to Gallup’s measure.
In Greece, the Athens Stock Exchange took as much as a 30% nosedive before closing down 23% in its first session to reopen since closing five weeks ago during the height of the Greek Debt Crisis.
Last week, Greek government officials met with a troika of creditors from the European Commission, European Central Bank and International Monetary Fund in the initial round of new talks aimed at completing a three-year, EUR 86 bailout. Gold is viewed as a safe haven for investors in periods of severe economic instability.
The possibility of a Greek departure from the euro, which could trigger contagion throughout the zone, has lessened dramatically since Greece agreed on a preliminary cash-for-reforms deal with its European creditors last month in a historic agreement.
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