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Gold slips as fading expectations of sharp rate cut lift dollar

Tuesday,   09-Jul-2019   08:54 AM (IST)

Gold prices fell on Tuesday as the dollar held near multi-week highs after investors reduced bets on an aggressive U.S. interest rate cut this month. Spot gold was down 0.3% at $1,391.65 per ounce at 0118 GMT. U.S. gold futures slipped 0.4% to $1,395.10 an ounce. The dollar index was hovering near a three-week high on Tuesday after investors rolled back expectations for a sharp U.S. rate cut at the end of July. Money market futures are still fully pricing in a 25 basis point cut at the Federal Reserve’s next policy meeting on July 30-31, but have almost priced out a larger 50 basis point reduction. Fed chief Jerome Powell’s comments in two-day testimony to Congress beginning on Wednesday will be closely watched to determine whether traders will continue to pare bets for deep interest rate cuts.  Asian stocks struggled to make a rebound on Tuesday. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.15% to 795.80 tonnes on Monday from 796.97 tonnes on Friday. Hedge funds and money managers raised their bullish stance in COMEX gold in the week to July 2, the U.S. Commodity Futures Trading Commission (CFTC) said on Monday in a report delayed because of the U.S. Independence Day holiday.