Gold Silver Reports (GSR) – Spot gold was down 0.2% at $1,290 per ounce, as of 11.54am. In the previous session, it slid to $1,281.76, its lowest since 27 December. US gold futures for June delivery slipped 0.1% to $1289.8 per ounce.
Gold prices dipped slightly on Tuesday, hovering not far off a 2018 low struck in the previous session as a firm dollar near five-month highs and optimism in global markets curbed appetite for the precious metal. “I think the overriding narrative here is where the dollar is going,” said Stephen Innes, APAC trading head at OANDA. Abating geo-political risk was also weighing on sentiment for gold, he added.
The dollar traded below a five-month high against a basket of currencies on Tuesday, catching its breath after a broad rally inspired by rising US bond yields and relief at an easing of US-China trade tensions.
Washington and Beijing both claimed victory on Monday as the world’s two largest economies stepped back from the brink of a global trade war and agreed to hold further talks to boost US exports to China.
Meanwhile, Asia-Pacific shares outside Japan extended gains on Tuesday amid renewed optimism about global growth after the US-China agreement.
Expectations that the Federal Reserve will lift US interest rates again next month added to downward pressure on gold. Higher US rates tend to boost the dollar and push bond yields up, make non-yielding assets like bullion less attractive.
US Treasuries were steady on Monday, after benchmark yields rose to a seven-year peak last week, as investors awaited release of the latest Federal Reserve minutes on Wednesday.
Accelerating inflation means the Fed should hike interest rates two or possibly three more times this year, and could move as soon as next month, Philadelphia Fed President Patrick Harker said on Monday.
“Somewhere around the $1,275 level we are going to start to attract more bullish sentiment, but in the mean time the driver is going to remain the US dollar,” Innes said.
Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.38% to 852.04 tonnes on Monday.
Among other precious metals, silver slid 0.3% to $16.44 an ounce, while palladium was largely unchanged at $989.05 an ounce. Platinum climbed 0.1% to $896.50 an ounce, after marking a fresh low for the year in the previous session at $873.50. – Neal Bhai Reports (NBR)
