Investing.com - The dollar is wilting in the countdown to the Fed's minutes, and gold bugs are blooming.
Bullion, as well as futures of gold, extended their reach higher into $1,300 territory on Tuesday as hedge funds and retail investors in the precious metal awaited to see what Federal Reserve bankers discussed at their March meeting. The minutes of that, due at 2:00 PM ET on Wednesday, will likely provide clues on whether the central bank will continue with its pause on rates or move into an easing, as President Donald Trump wishes, to jump-start the economy.
Spot gold, reflective of trades in bullion, was up $6.82, or 0.5%, at $1,304.27 an ounce by 2:43 PM ET (18:43 GMT), after hitting a two-week high at $1,306.24.
Gold futures for June delivery, traded on the Comex division of the New York Mercantile Exchange, settled the official session up $6.40, or 0.5%, at $1,308.30 per ounce. It hit $1,310.25 earlier, its highest level since March 28.
Gold rose as the dollar fell in anticipation of the Fed coming under further White House pressure on the central bank to turn dovish on rates. The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, fell by 0.1% to 96.618 after a two-week low earlier at 96.458.
Also aiding gold's safe-haven play was data pointing to a decline in new orders for U.S.-made goods in February, after last week's robust U.S. jobs data for March that came at the expense of slower wage growth.
“The decline in wage inflation takes the pressure off the U.S. Federal Reserve and lets it remain dovish and delay rate hikes or maybe switch gears, and that’s supportive for gold,” Ilya Spivak, senior currency strategist at DailyFX, told Reuters.
Market participants are expected to pay close attention to Fed Vice Chairman Rich Clarida's speech at a central bank event in Minneapolis at 6:45 PM ET for more clarity on where the Fed is going with rates.
The Fed's sharp dovish pivot in March caught some market participants by surprise. Also at end-March, Clarida said in a speech in Europe that the central bank cannot ignore overseas spillover effects. Investors will be looking for more clues on both the Fed’s near-term and long-term outlook on international risks and the overall economic outlook in the U.S.
“Vice Chair Clarida has represented the more dovish side of the FOMC over the past several months, and he should continue to sound very cautious on the global outlook and stress patience given muted inflation," TD Securities wrote in a note on Friday. "He may suggest allowing a significant overshoot before hiking again. If asked, he is likely to concede there are rate cut scenarios, but not that likely in his view.”
Palladium rose for a second-straight day slide to remain the world's priciest metal.
Spot palladium was up $4.65, or 0.3%, at $1,390.50 an ounce. The silvery-white auto-catalyst metal, used for purifying gasoline emissions, traded some $300 above gold early last month before cutting that premium to about less than $100 lately.
Trades in other Comex metals as of 2:43 PM ET (18:43 GMT):
Palladium futures up $10.40, or 0.8%, at $1,363.50 per ounce.
Platinum futures down $15.40, or 1.7%, at $897.50 per ounce.
Silver futures down 1 cent, or 0.1%, at $15.31 per ounce.
Copper futures flat at $2.93 per pound.