Gold Prices Flat as Market Focus Turns to Fed Speakers

Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
TT

Gold Prices Flat as Market Focus Turns to Fed Speakers

Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo

Gold prices were flat on Tuesday with market participants awaiting US data and comments from Federal Reserve officials for more clarity on the central bank's roadmap for interest rate cuts.
Spot gold was unchanged at $2,317.86 per ounce, as of 0730 GMT. US gold futures rose 0.2% to $2,332.40, Reuters reported.
"The fact that gold's direction has alternated over the past four days without really going anywhere of significance tells me the market is waiting for something to wake it from its lull," City Index senior analyst Matt Simpson said.
"Should US retail sales sink, perhaps gold can make a break of $2,350."
The US retail sales data is due at 1230 GMT later in the day, followed by weekly jobless claims on Thursday and flash purchasing managers' indexes on Friday. Data released last week showed a moderation in the labor market and price pressures.
Philadelphia Fed President Patrick Harker revealed on Monday that he is in the single rate cut camp, but left the door open to changing his view depending on incoming data.
A long list of Fed officials will take to the podium at various venues later in the day, including the Chicago Fed's Austan Goolsbee and the Richmond Fed's Thomas Barkin.
Traders are seeing a 75% probability of an interest rate cut in November, according to the CME Group's FedWatch Tool. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
More central banks plan to add to their gold reserves within a year and more of them expect others to do so as well, due to ongoing macroeconomic and political uncertainty despite high prices for the precious metal, the World Gold Council said in its annual survey.
Among other metals, spot silver fell 0.6% at $29.31 per ounce, platinum rose 0.8% to $971.94 and palladium lost 0.1% to $888.20.



UK Borrowing Overshoot Underscores Task for New Government

Larry the Cat sits on Downing Street in London, Britain July 19, 2024. REUTERS/Toby Melville
Larry the Cat sits on Downing Street in London, Britain July 19, 2024. REUTERS/Toby Melville
TT

UK Borrowing Overshoot Underscores Task for New Government

Larry the Cat sits on Downing Street in London, Britain July 19, 2024. REUTERS/Toby Melville
Larry the Cat sits on Downing Street in London, Britain July 19, 2024. REUTERS/Toby Melville

Britain's government borrowed a lot more than forecast in June, according to official data published on Friday that highlighted the big budget challenges facing the new government of Prime Minister Keir Starmer.
Public sector net borrowing, excluding state-controlled banks, was a larger-than-expected 14.5 billion pounds ($18.75 billion) last month. A Reuters poll of economists had pointed to an increase of 11.5 billion pounds.
Dennis Tatarkov, Senior Economist at KPMG UK, said the data showed "the daunting task" for the new government to fund its agenda without worsening the public finances.
"A combination of high levels of spending and weak growth prospects will present uncomfortable choices – deciding between even more borrowing or substantially raising taxes if spending levels are to be maintained," he said.
New finance minister Rachel Reeves is likely to announce her first budget after parliament's summer recess. She and Starmer have ruled out increases in the rates of income tax, corporation tax and value-added tax, leaving her little room for maneuver to improve public services and boost investment.
Reeves has ordered an immediate review of the new government's "spending inheritance", a move that lawmakers from the opposition Conservative Party say could presage increases in taxes on capital gains or inheritances.
"Today's figures are a clear reminder that this government has inherited the worst economic circumstances since the Second World War, but we’re wasting no time to fix it," Darren Jones, a deputy Treasury minister, said after the data was published.
Starmer's government says it will speed up Britain's slow-moving economy - and generate more tax revenues - via a combination of pro-growth reforms and a return to political stability that will attract investment.
The borrowing figure for June was 2.9 billion pounds higher than expected by Britain's budget watchdog whose forecasts underpin government tax and spending plans.
In the first three months of the financial year which began in April, borrowing was 3.2 billion pounds higher than projected by the Office for Budget Responsibility at 49.8 billion pounds.
The Office for National Statistics said June's borrowing was the lowest for the month since 2019, helped by a big drop in spending on interest paid on bonds linked to inflation which has slowed sharply.
But the deficit was made bigger by a 1.2 billion-pound fall in social security contributions compared with June 2023. They were cut by former Prime Minister Rishi Sunak before the July 4 election that swept Starmer's Labour Party to power.