Gold stalls as investors focus on Powell's speech

Gold prices were subdued on Tuesday as U.S. Treasury yields extended gains, ahead of economic data and Federal Reserve Chair Jerome Powell’s speech this week that could steer upcoming interest rate decisions.

FUNDAMENTALS

* Spot gold dropped 0.2 per cent to $1,916.20 per ounce by 0121 GMT, and U.S. gold futures fell 0.2 per cent to $1,929.90.

* The U.S. dollar and Treasury yields gained 0.1 per cent, making non-yielding bullion expensive for other currency holders.

* Fed officials may not raise interest rates when they meet in two weeks, but neither will they say their 19-month drive to hike borrowing costs is over, a difficult messaging challenge U.S. central bank chief Jerome Powell will take on this week.

* Higher interest rates usually dull gold’s appeal as it increases the opportunity cost of holding the asset, which bears no interest.

* While investors await more U.S. interest rate cues, they are also keeping an eye on the Middle East tensions that boosted safe-haven gold prices to over three-week highs on Friday.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.80 per cent to 855.45 tonnes on Monday.

* Industrial gold production in Mali, one of Africa’s top producers of the precious metal, is expected to reach or even exceed its 67.7 tonnes forecast for 2023, according to a mines ministry official.

* Newcrest Mining, which is in the final stages of a takeover by Newmont Corp, on Tuesday posted an 18.1 per cent sequential fall in quarterly gold production, hurt by maintenance shutdowns during the quarter.

* Spot silver eased 0.2 per cent to $22.55 per ounce, platinum was steady at $890.81 and palladium rose 0.1 per cent to $1,144.96. DATA/EVENTS (GMT) 0600 UK Claimant Count Unem Chng Sept 0600 UK ILO Unemployment Rate Aug 0600 UK HMRC Payrolls Change September 0900 Germany ZEW Economic Sentiment Oct 0900 Germany ZEW Current Conditions Oct 1230 US Retail Sales MM Sept 1315 US Industrial Production MM Sept