Gold fell on Tuesday as the dollar edged higher, while prospects of elevated US interest rates for a longer period also weighed on the non-yielding bullion’s appeal.
Spot gold fell 0.2% to $1,733.79 per ounce by 0620 GMT, having hit a one-month low of $1,719.56 in the previous session.
US gold futures were also down 0.2% at $1,745.50.
The dollar index ticked up 0.1%, after easing off a two-decade peak hit on Monday.
Gold will continue to be driven by sentiment in the dollar in the short term, said Stephen Innes, managing partner at SPI Asset Management.
“The market’s in a wait-and-see mode to see how the economic data plays out and if it starts to get bad in the US I think that’s going to encourage the gold bulls to come back into the fray again,” Innes added.
Gold recovers from one-month low as US dollar backtracks
At the Jackson Hole central banking conference in Wyoming the US Federal Reserve and the European Central Bank struck a hawkish note, pledging all efforts to tame stubbornly high inflation even if growth takes a hit.
While gold is considered a safe bet during economic uncertainty, interest-rate hikes increase the opportunity cost of holding the bullion.
Markets are now largely pricing in a 75-basis-point rate hike at the Fed’s September meeting.
Indicative of investor sentiment, holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.4% to 980.61 tonnes on Monday.
Spot gold may retest a resistance at $1,742 per ounce, a break above which could lead to a gain into a $1,748-$1,755 range, according to Reuters technical analyst Wang Tao.
Spot silver fell 0.3% to $18.70 per ounce, platinum dropped 0.9% to $855.87 and palladium inched 0.1% lower to $2,144.44. Reuters
Comments
Comments are closed.