Gold consolidates on mixed signals after Fed hawkish tilt

GOLD prices moved back and forth within a narrow range after the sharp selloff last week sent prices tumbling to the lowest level in two months. US Fed officials have voiced mixed opinions about tapering stimulus programmes and how soon US interest rates be raised. Fed chair Jerome Powell has also restated that price increases recently were bigger than expected, but will likely wane.

Benchmark gold futures for August delivery on the Comex Exchange and spot gold prices spent the first five days of the week caught in a narrow box of a US$40 range, between support at US$1,760 and resistance at US$1,800. Trading volume was low inside the tight trading range, with the price action suggesting investor indecision and impending volatility.

Unlike gold, the dollar and 2-year Note yield benefitted from the Fed's moderate tilt away from dovishness while the 10-year Treasury yields had a mixed performance.