Gold futures edged higher Tuesday, clinging to a gain after a weaker-than-expected reading on U.S. February retail sales, finding support ahead of a two-day Federal Reserve meeting that’s expected to see policy makers reiterate a hawkish stance.
Gold for April delivery GC00, 0.17% GCJ21, 0.17% was up 90 cents, or 0.1%, at $1,730.10 an ounce on Comex, while May silver SIK21, -0.83% was off 19.80 cents, or 0.7%, at $26.09 ounce.
Gold trimmed its gain after data showed sales at U.S. retailers fell 3% in February due to a lapse in government aid and a bout of unusually bad weather. Sales are expected to pick up as the government sends $1,400 stimulus checks to most Americans.
Gold remains down more than 8% for the year to date, having felt pressure from a rising U.S. dollar and a bond-market selloff that’s pushed the yield on the 10-year Treasury note TMUBMUSD10Y, 1.595% higher for six straight weeks. Higher yields raise the opportunity cost of holding non-yielding assets like gold.
Central-bank interest remains strong in maintaining gold as part of their reserves, said Eugen Weinberg, analyst at Commerzbank, in a note.
Gold is also finding support ahead of the conclusion Wednesday of the Fed’s policy meeting, with policy makers expected to confirm a “long-term dovish approach to interest rate policy despite the significantly improved economic outlook,” he said.