2019.06.1806:58:00UTC+00Gold Rises As Dollar Pulls Back After Weak Data

Gold prices rose on Tuesday and the U.S. dollar pulled back from multi-week highs as a two-day policy meeting of the U.S. Federal Reserve gets underway later today.

The dollar lost some ground after a key indicator of the health of the U.S. manufacturing sector tanked in June, suggesting that business sentiment around new tariffs is starting to bite.

A weaker dollar makes bullion cheaper for investors holding other currencies.

Spot gold rose 0.45 percent to $1,345.72 an ounce while U.S. gold futures were up half a percent at $1,349.25 an ounce.

The U.S. central bank is unlikely to cut rates at its two-day meeting, but the Fed's statement on Wednesday may offer fresh clues as to the timing around a possible interest-rate cut later this year.

Markets have nearly priced in hopes for a rate cut eventually since the Fed chairman made remarks on June 4 suggesting a lower rate.

European Central Bank President Mario Draghi said earlier today that the central bank still has room to cut interest rates and measures to cushion the side effect from low interest rates.

Speaking at the ECB Forum on Central Banking in Sintra, Portugal, Draghi said, "Further cuts in policy interest rates and mitigating measures to contain any side effects remain part of our tools." "And the APP [asset purchase program] still has considerable headroom."