Gold Prices Lower on Waning Geopolitical Tensions, Firmer Dollar

Investing.com – Gold prices fell on Monday, nearing their recent five-week lows as waning geopolitical tensions and a stronger dollar weighed on demand for the precious metal.

for June delivery on the Comex division of the New York Mercantile Exchange were down $5.10 or 0.38% to $1,318.30 a troy ounce by 04:40 AM ET (08:40 AM GMT), re-approaching the five-week low of $1,315.70 set on Thursday.

Safe haven demand for gold faded as geopolitical tensions in the eased.

Meanwhile, the , recovering after Friday’s pullback from three-and-a-half month highs. The , which measures the greenback’s strength against a basket of six major currencies, was up 0.19% to 91.48.

A stronger U.S. currency makes dollar denominated gold more expensive for overseas buyers.

The dollar index climbed 1.37% last week, boosted by rising U.S. yields and the prospect of a faster pace of rate hikes by the Federal Reserve this year.

The yield on rose above psychologically important 3% level for the first time since 2014 last week, amid rising inflation expectations.

The yield subsequently backed off that level and was last at 2.964%.

The recent rise in Treasury yields has stoked investors’ worries about higher interest rates, which tend to make non-yield bearing gold less attractive to investors.

Investors were turning their attention to a Fed meeting and the nonfarm payrolls report for April later this week.

The Fed is unlikely to raise rates at the conclusion of its two-day meeting on Wednesday after a hike in March, but the central bank’s statement will be closely watched amid speculation over whether it will raise rates four times this year, rather than the three signaled by policy makers.

In other precious metal trade, slipped 0.19% to $16.37 a troy ounce, while were down 0.85% to $908.50.

Among base metals, gained 0.44% to trade at $3.083 a pound.

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