By Barani Krishnan
Investing.com – The dollar is going back to being the preferred hedge to the trade war, taking away more of gold’s allure.
Bullion and futures of gold hit a more-than two-week bottom on Tuesday as technology stocks fueled a rebound on Wall Street. The rally came as the United States temporarily eased curbs on China’s Huawei Technologies, raising expectations that the two countries would work toward a trade deal.
The dollar rose, too, as some investors twinned the greenback with equities in their play on the trade war.
, reflective of trades in bullion, traded at $1,274.45 per ounce by 3:30 PM ET (19:30 GMT), down $3.33, or 0.3%, on the day.
for June delivery, traded on the Comex division of the New York Mercantile Exchange, settled down $4.10, or 0.3%, at $1,273.20 per ounce.
“Gold under pressure today as dollar gains with U.S. securities and U.S. debt buyers need dollars to pay for them,” said George Gero, precious metals analyst at RBC Wealth Management in New York.
The U.S.-China trade war has been one of the pillars of support for gold this year as investors sought protection from the yellow metal, which had become a safe haven in times of both economic and political troubles.
Bullion reached a one-month peak of $1,303.35 last Tuesday after China countered higher U.S. tariffs on its goods by announcing duty hikes of its own on American merchandise. June gold soared to a one-month high $1,304.15 the same day.
The , which measures the greenback against a basket of six currencies, was up 0.1% at a one-month high of 97.98.
Like gold, the dollar has also been used as insurance against the U.S.-China trade war. Still, gold has an advantage over the dollar in the trade war as a positive resolution in the form of a trade agreeement could see jewelry and other bullion-related consumption rise in China.
Elsewhere in metals, palladium fell 1% but managed to hold on to its mantle as the world’s costliest traded metal.
was down $14.30 at $1,320.60 an ounce.
Trades in other Comex metals as of 3:30 PM ET (19:30 GMT):
down $17, or 1.3%, at $1,314 per ounce.
up $2, or 0.3%, at $816.20 per ounce.
down 2 cents, or 0.1%, at $14.43 per ounce.
down 1 cent, or 0.4%, at $2.72 per pound.