The yellow metal extended gains on Tuesday, with spot climbing to a more than one-week high at the beginning of the New York session as last Friday’s NFP report continued to take its toll on the dollar, diminishing hopes of a September rate hike by the Fed.
Gold rose to an 11-day peak of $1,335.78 an ounce before losing momentum, as investors now shift their attention to ISM services PMI. The spot was last trading at $1,334.73 an ounce, recording a 0.56% gain on Tuesday.
The metal has benefitted from lower expectations of an imminent rate hike by the Fed. Still investors consider December as a possibility for such a move. The metal remains sensitive to changes in Fed funds rates, which raise the opportunity cost of holding non-yielding assets while lifting the dollar in which the metal is priced.
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