Investing.com - Gold prices struggled for direction in subdued European trade on Tuesday, as market players awaited comments from a barrage of Federal Reserve officials later in the session to judge the balance of opinion among policymakers on the prospect of further rate hikes.
St. Louis Fed President James Bullard is set to speak at 13:35GMT, or 9:35AM ET, on Tuesday to the Gateway Chapter of the National Association for Business Economics.
Fed Governor Daniel Tarullo is due to give remarks at 13:15GMT, or 9:15AM Et, on shadow banking, while Minneapolis Fed President Neel Kashkari is expected to give remarks at 21:30GMT, or 5:30PM ET, on the economy and the role of the Federal Reserve System.
Gold for August delivery on the Comex division of the New York Mercantile Exchange dipped 60 cents, or 0.05% to trade at $1,356.00 a troy ounce by 06:45GMT, or 2:45AM ET.
A day earlier, gold shed $1.80, or 0.13%, as strong gains in global equity markets dampened demand for the yellow metal.
Losses were limited amid speculation central banks in some of the world’s leading economies will step up monetary stimulus in the near-term to counteract the negative economic shock from the Brexit vote.
The Bank of England could potentially cut borrowing costs and add to its asset-purchase program when it meets this week.
Meanwhile, in Japan, Prime Minister Shinzo Abe flagged a fresh fiscal stimulus package on Monday after his ruling coalition won a landslide victory in the Upper House on Sunday. The coalition’s firmer grip means policymakers can more easily approve a bigger fiscal stimulus package to spur the economy. A stimulus package of at least 10 trillion yen ($97.9 billion) is expected.
Expectations of monetary stimulus tend to benefit gold, as the metal is seen as a safe store of value and inflation hedge.
Market participants are also betting that the Federal Reserve would hold off on raising borrowing costs this year, despite last week's upbeat U.S. jobs report. Interest rate futures are currently pricing in just a 24% of a rate hike by December.
The precious metal 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.
Gold surged to $1,377.50 last week, a level not seen since March 2014, as uncertainty surrounding global growth in wake of Britain’s vote to exit the European Union sent investors flooding into safe haven assets.
Prices of the yellow metal are up nearly 30% so far this year amid fading expectations of a Federal Reserve rate hike and as expectations mounted that central banks around the world will step up monetary stimulus to counteract the negative economic shock from the Brexit vote.
Also on the Comex, silver futures for September delivery inched up 9.4 cents, or 0.46%, to trade at $20.39 a troy ounce during morning hours in London, while copper futures advanced 1.0 cent, or 0.49%, to $2.158 a pound.