Gold prices were little changed on Tuesday and the dollar hit its highest level in a month against its basket after China’s top financial regulator said that he is concerned about risks arising from bubbles in financial markets and huge inflow of foreign capital.
Spot gold was marginally higher at $1,725.67 per ounce while U.S. gold futures were little changed at $1,724.05.
Bubbles in U.S. and European markets could burst because their rallies are heading in the opposite direction of their underlying economies and would have to face corrections “sooner or later,” Guo Shuqing, Chairman of the China Banking and Insurance Regulatory Commission (CBIRC) and Party secretary of the central bank said.
Guo’s comments stocked concerns about further tightening in the world’s second-biggest economy.
Traders await a series of Fed speeches this week, culminating with Powell on Thursday and the February U.S. employment report due on Friday, which will provide an update on the speed and direction of the nation’s labor market recovery.
On the virus front, the number of new coronavirus infections globally rose for the first time in almost two months in the past week due to relaxing of public health measures, circulation of variants and people letting down their guard, the World Health Organization said.