FUNDAMENTALS
* Spot gold was up 0.3% at $1,723.01 per ounce, as of 0104 GMT, while U.S. gold futures were steady at $1,719.80.
* The dollar fell for a fourth straight session, down 0.1% against a basket of major currencies, as investors weighed the implications of a rate hike by the Federal Reserve in an economy that may be on the verge of a recession.
* A weaker dollar makes gold less expensive for buyers holding other currencies.
* The U.S. central bank is widely expected to raise interest rates by 75 basis points at the conclusion of its policy meeting on Wednesday. A hike of that magnitude would effectively close out pandemic-era support for the economy.
* Expectations for a hike of 75 basis points from the Fed stand at about 79%, according to CME’s Fedwatch Tool,
with a 23% chance of a 100-bp hike.
* Meanwhile, the European Central Bank may not be done with big interest rate hikes after its initial half-point hike last week, Latvian central bank governor Martins Kazaks said in an interview with Bloomberg News.
* Rising interest rates increase the opportunity cost of holding non-yielding bullion.
* SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.06% to 1,005.29 tonnes on Monday from 1,005.87 tonnes on Friday.
* Spot silver rose 0.3% to $18.46 per ounce, platinum gained 0.6% to $884.50, while palladium edged 0.1% lower to $2,005.89.
DATA/EVENTS (GMT)
1400 US Consumer Confidence July
1400 US New Home Sales-Units June
U.S. Federal Open Market Committee starts its two-day meeting interest rates (to July 27)
