Gold ticks up on Iran tensions; firmer dollar limits upside

Monday,   22-Jul-2019   10:04 AM (IST)

Gold prices gained on Monday following a steep fall in the previous session as tensions in the Middle East and weaker financial markets supported the metal, while a stronger dollar kept a lid on gains. Spot gold was up 0.2% at $1,427.26 per ounce as of 0322 GMT. The metal hit $1,452.60 in the previous session, its highest since May 2013, before closing 1.5% lower. U.S. gold futures were up 0.1% at $1,428.50 an ounce. Iran’s Revolutionary Guards said they had captured a British-flagged oil tanker in the Gulf after Britain seized an Iranian vessel earlier this month, ratcheting up tensions along a vital international oil shipping route. Britain was weighing its next moves on Sunday, with few good options apparent as a recording emerged showing that the Iranian military defied a British warship when it boarded and seized the ship three days ago. Meanwhile, Asia stocks eased on Monday as investors reduced expectations of an aggressive interest rate cut by the Federal Reserve. Likelihood of a smaller rate cut from the U.S. central bank lifted the dollar, making gold expensive for investors holding other currencies. The Wall Street Journal reported the Fed was likely to cut rates by 25 basis points when it meets later this month, and may make further cuts in the future given global growth and trade uncertainties. Expectations for a rate cut of half a percentage point at the Fed’s July 30-31 meeting edged out further on Monday to hit 14.5%, according to CME’s FedWatch tool, down from as high as 71% last week.