By Alex Ho
Investing.com – Gold prices traded slightly higher on Tuesday in Asia following reports of potential monetary policy easing by major central banks.
Gold futures for April delivery rose 0.3% to $1,599.60 by 12:59 AM ET (04:59 GMT).
Central banks including the U.S. Fed, European Central Bank, Bank of Japan and Bank of England have hinted at action in recent days.
As for rate cut expectations, fed funds futures are pricing in a 100% chance that the Federal Reserve will cut rates by 50 basis points at its meeting March 18, Investing.com’s Fed Rate Monitor Tool showed.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
However, some analysts believe gold’s gains could be short lived.
“The advance could be limited and further losses are likely after risk trades, including those in oil and stocks, came roaring back on Monday on action promised by global central banks in fighting the coronavirus,” said Barani Krishnan, commodity analyst at Investing.com.
Fawad Razaqzada, a technical chartist at forex.com for both macro commodities and currencies, echoed with Krishnan’s comments.
“After last week’s big falls, more pain could be on the way for gold bulls than gains this week,” he said. “While I still remain bullish on gold in the long term, I now think prices may go on to correct themselves for a while before starting to push higher again.”
Traders now await a G7 conference call later in the day, where finance ministers and central bank governors will discuss measures to deal with the epidemic and its economic impact.
Gold Prices Trade Slightly Higher on Reports of Global Central Banks’ Support
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.