Gold was up on Tuesday morning in Asia as the dollar weakened. Investors also remain concerned about potential interest rate hikes to curb rising inflation.
Gold futures inched up 0.02% to $1,868.05 by 10:59 PM ET (2:59 AM GMT), its highest level since Feb. 1, 2021. The dollar, which usually moves inversely to gold, slid near multi-month lows.
Investors remain concerned that a sign of rising inflation will force the U.S. Federal Reserve to hike interest rates earlier than expected.
However, Fed President Robert Kaplan said on Monday said he doesn’t see inflation becoming a problem anytime soon and reiterated that he didn’t expect a hike in the interest rate until 2022. However, he also urged the Fed to start normalizing policy.
“The forecast has improved, my forecast has improved meaningfully,” said Kaplan, who is expecting a 6.5% growth in the gross domestic product in 2021.
“Having said that, we’re still in the middle of COVID-19, and I want to see more than a forecast. I want to see actual evidence that that forecast is going to unfold,” he added.
Investors now await minutes of the Fed’s latest meeting, due on Wednesday, for further clues to the movement of the central bank’s monetary policy.
In Asia, the Reserve Bank of Australia released the minutes from its latest policy meeting earlier in the day.
Japan’s GDP contracted 5.1% year-on-year and 1.3% quarter-on-quarter during the first quarter of 2021 as its consumption has been hit by a slow rollout of the COVID-19 vaccine and a resurgence of COVID-19 cases.
Other countries in the region, including Taiwan and Singapore, are also battling a spike in COVID-19 cases.
In other precious metals, palladium increased 0.3%, while silver and platinum edged up 0.2%.