Gold down on firmer dollar demand

Gold down on firmer dollar demand

Gold down on firmer dollar demand

Data on Monday showed new orders for key USA -made capital goods unexpectedly fell in May and shipments also declined. The contract had retreated to a 10-month low of US$42.05 a barrel last week before the sharp retreat stalled.

The dollar index, which tracks the greenback against a basket of six major rivals, inched 0.1 per cent lower on the day to 97.367.

Adding to the sentiment was a rise in European shares, driven by Italian banks gaining after a deal to wind up two failed lenders.

Oil rose for a third straight session, as speculators took advantage of last week's drop to seven-month lows, although a relentless increase in US supply and little evidence of a widespread drop in global inventories capped gains.

Philadelphia Fed President Patrick Harker said on Tuesday the Fed rightly plans to raise rates once more this year, given recent inflation weakness is likely temporary.

The Fed has raised rates three times since December and aims to begin shedding some of its $4.5-trillion in bond holdings later this year.

Meanwhile, Mr Williams said labour markets will continue to strengthen, with the United States unemployment rate, now at a 16-year low of 4.3 per cent, likely to fall further and stay a little above 4 per cent through next year.

Investors are listening to the Fed for signs of a change in its economic outlook that could delay rate increases or when it will begin shrinking its $4.5 trillion balance sheet.

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But she said another crisis can't be excluded, although she hoped "it will not be in our lifetime".

At 9:39am. ET (1339 GMT), the Dow Jones Industrial Average was up 75 points, or 0.35 per cent, at 21,469.76, the S&P 500 was up 8.67 points, or 0.35 per cent, at 2,446.97.

The Nasdaq Composite was down 28.06 points, or 0.45 per cent, at 6,219.09.

But softer-than-expected United States data overnight gave rise to some caution.

In the U.S., with concerns persisting about the absence of vigorous growth momentum and recent weakening in inflation, the coming week brings several top-tier economic releases.

Micron was up 1.5 percent at $32.20 after Cowen & Co increased its price target on the chipmaker's stock.

"With the rate hike now 96 percent priced in, focus will fall on the Fed's forward guidance and importantly their views surrounding low inflation", Stephen Innes, senior trader at OANDA, said in a note.

The Fed chair is due to join a discussion in London on global economic issues that takes place after a recent batch of weak US economic data.

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