· Gold prices fell on Tuesday, as strength in the U.S. dollar pressured the precious metal into giving back all of the previous session’s gains and then some.
· The decline for prices comes just a day after gold settled at its highest level in almost three months, boosted by investor demand for the perceived safety of the precious metal as the war of words between the U.S. and North Korea continued to smolder.
· On Tuesday, gold for December delivery GCZ7, -0.17% fell $5.70, or 0.4%, to settle at $1,291 an ounce. It settled at $1,296.70 on Monday—the highest settlement since early June, up 0.4%, or $5.10.
· The contract briefly jumped above $1,300 in Friday’s session for the first time this year, as a terrorist attack in Barcelona and concerns about President Donald Trump’s pro-business agenda helped to spark a rush to haven assets, but prices pulled back that day to post a modest loss.
· The greenback, as measured by the ICE U.S. Dollar Index DXY, +0.13% climbed by 0.5%. A stronger dollar tends to weigh on dollar-denominated gold prices.
· “Gold was under noticeable pressure on Tuesday…as the dollar stabilized,” said Lukman Otunuga, market analyst at FXTM, in a note.
“Regardless of the short-term losses, the yellow metal remains heavily supported by geopolitical risk and political drama in Washington,” said Otunuga. “There is still a lingering air of caution ahead of the Jackson Hole conference later this week and this should empower gold bulls.”
· Traders and investors showed caution ahead of the Fed’s three-day Jackson Hole, Wyo., economic policy symposium of global central bankers beginning Thursday. Financial markets will be looking for hints from central bankers on any changes to monetary policy. Higher rates tend to boost the dollar, cutting demand for gold investors using other currencies. Higher rates also boost the appeal of investments that offer a yield, which gold does not.
· From a technical standpoint, gold is “bullish on the daily charts, as there have been consistently higher highs and higher lows,” said Otunuga. “Bulls still have some control above the $1,283 support, with a break above $1,293 opening a path towards $1,300.”
· September silver SIU7, -0.22% fell 3.3 cents, or 0.2%, to $16.982 an ounce.
Reference: Market Watch
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