Gold ticked up on Tuesday, in spite of a firmly stronger dollar, as investors awaited two critical central bank meetings later this month for further indications on the strength of the yellow metal as a hedge against inflation.
On the Comex division of the New York Mercantile Exchange, Gold for August delivery traded between $1,325.50 and $1,335.25 an ounce before settling at $1,332.65, up 3.35 or 0.25% on the session. Gold has rebounded somewhat over the last two sessions after retreating from 28-month highs earlier this month in a Brexit-inspired rally. Last week, Gold slid by more than 2.2% suffering its first negative week since early-June.
Nevertheless, Gold is on track for one of its strongest years on record after soaring roughly 25% year to date. Gold has ticked up since last Friday's close, as some jittery investors have sought safety in the precious metal in the wake of a failed coup attempt in Turkey.
Gold likely gained support at $1,311.60, the low from June 29 and was met with resistance at $1,368.60, the high from July 7.
On Tuesday, stocks on Wall Street hovered in record territory as the Dow Jones Industrial Average remained on pace for its eighth consecutive winning session. Over the last week, both the Dow and the S&P 500 Composite index have achieved all-time intraday and closing highs on multiple sessions, amid clear signals of weakness among euro area banking stocks and a plunging Japanese Yen. The rally among U.S. equities has dampened investor's optimism toward Gold in broad risk-on trade. In Tuesday's session, the S&P and NASDAQ Composite index were dragged down by subdued quarterly results from Netflix Inc (NASDAQ:NFLX), while the Dow received a boost after Johnson & Johnson (NYSE:JNJ) beat analysts' second quarter earnings forecasts.
Investors were largely hesitant to make any major moves ahead of the European Central Bank's monetary policy meeting on Thursday. The ECB's Governing Council is widely expected to stand pat in its first interest rate decision since last month's historic Brexit decision. While the Governing Council will receive updated economic data from the release of Germany's ZEW Economic Sentiments survey and consumer confidence indicators throughout the euro zone, the ECB has still received a relative dearth of information on how the economy has responded to last month's shock in the U.K.
Next week, the Federal Reserve will also issue its latest interest rate decision upon the completion of its two-day July meeting on July 27. Since the Federal Open Market Committee (FOMC) held short-term interest rates steady in June, a number of policymakers have been split on the timing of the U.S. central bank's next rate hike.
Any rate hikes by the FOMC this year are viewed as bearish for Gold, which struggles to compete against high-yield bearing assets in rising rate environments.