Gold edged lower on Tuesday, as the US
dollar rebounded slightly after a slide in the previous session,
weighing on demand for greenback-priced bullion.
Spot gold fell 0.2% to $1,850.40 per ounce, as of
0240 GMT, after rising to its highest since May 9 of $1,865.29
on Monday. US gold futures were flat at $1,848.20.
The safe-haven dollar clawed back some of its
overnight losses. A stronger dollar makes bullion more expensive
for overseas buyers.
“The weaker dollar has helped gold break back above its
200-day average… and we’re not yet convinced the greenback has
seen a low,” City Index senior market analyst Matt Simpson said.
Kansas City Federal Reserve Bank President Esther George
said on Monday she expects the US central bank to lift its
target interest rate to about 2% by August, with further action
dependent on how both supply and demand are affecting inflation.
Bullion, seen as a safe store of value during times of
economic crises, tends to become less attractive to investors
when US interest rates are raised because it yields nothing.
“Gold continues to look oversold to my eyes and the daily
close (on Monday) above the 200-day average is constructive for
bulls,” Simpson said.
SPDR Gold Trust , the world’s largest gold-backed
exchange-traded fund, said its holdings rose 0.44% to 1,068.07
tonnes on Monday from 1,063.43 tonnes on Friday.
Benchmark US 10-year Treasury yields eased, limiting
losses in zero-yield gold.
Spot silver dipped 0.3% to $21.71 per ounce, and
platinum eased 1.3% to $946.00, while palladium
edged up 0.1% to $1,994.50.
Russia’s Nornickel on Monday cut its estimate for the global
palladium market deficit in 2022 due to lower demand from the
car industry amid the Ukraine crisis and a slow recovery of the
chip market from shortage.
(Reporting by Bharat Govind Gautam in Bengaluru; Editing by
Sherry Jacob-Phillips and Rashmi Aich)