Gold is trading higher today on Tuesday as investors look ahead to important data on the U.S. economy later in the week. On Monday optimism weakened as data showed U.S. consumer spending fall at the fastest pace since 2009 and data last week that showed the U.S. economy grew by a weaker-than-expected 2.6%. Today market participants await data on U.S. Factory Orders.
The new Greek government retreated from a plan for a write-off of its debt and proposed a new debt arrangement to reach a compromise with its international creditors on the terms of its bailout. Finance Minister Varoufakis reassured in London that Greece is not seeking a standoff with the European Union.
In January gold prices increased by almost 8% as the precious metal was sought after as safe-haven asset. Expectations that the FED is going to hike interest rates in mid-2015 as the U.S. economy is growing and the labour market is improving might decrease if the upcoming data fails to show that the economy is on track. A future interest rate hike puts pressure on gold. Higher interest rates make gold less attractive as the metal is not yield-bearing. A stronger greenback recently also weighed on the dollar-denominated precious metal as it makes it more expensive for holders of other currencies.
The precious metal is currently quoted at USD1,281.60, 0,52% a troy ounce. On Thursday the 22nd of January gold reached a five-month high at USD1,307.40.