Investing.com - Gold prices held steady at a three-week high in European trade on Tuesday, as investors awaited fresh signals about the timing of a possible U.S. interest rate increase this year.
Gold for December delivery on the Comex division of the New York Mercantile Exchange dipped 40 cents, or 0.03% to trade at $1,359.20 a troy ounce by 06:56GMT, or 2:56AM ET, just below a three-week peak of $1,362.00 scaled last Friday. A day earlier, gold tacked on $2.10, or 0.15%.
Investors looked ahead to key U.S. data later Tuesday to gauge the health of the world's largest economy and whether it is strong enough to warrant a rate hike later this year.
The Commerce Department will release its core personal consumption expenditure (PCE) index for June, along with personal income and spending for the same month at 12:30GMT or 8:30AM ET.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.2% at 95.56 early Tuesday, falling back towards a five-week low of 95.34 hit late last week.
The dollar has been under pressure in recent sessions amid waning expectations that the Federal Reserve will raise interest rates anytime soon after data showed the U.S. economy grew much slower than expected in the second quarter.
Fed funds futures are currently pricing in just an 18% chance of a rate hike by September. December odds were at 43%, compared to 53% at the start of last week.
Gold is sensitive to moves in U.S. rates. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
For the year, prices of the yellow metal are up nearly 26%, boosted by concerns over global growth and expectations of monetary stimulus.
Futures surged to a more than two-year high of $1,377.50 in early July, as concerns surrounding global growth in wake of Britain’s vote to exit the European Union sent investors flooding into safe haven assets.
Also on the Comex, silver futures for September delivery eased up 0.8 cents, or 0.04%, to trade at $20.51 a troy ounce during morning hours in London, while copper futures tacked on 1.3 cents, or 0.57%, to $2.212 a pound.