Investing.com – Gold prices remained lower on Tuesday as the dollar rebounded from a three-year low, while investors await the minutes of the latest Federal Reserve meeting due tomorrow.
Trading volumes were expected to remain thin however, as Wall Street was closed on Monday for a holiday. Comex were down 0.88% at $1,344.30 a troy ounce as of 11:20 pm ET.
The dollar was supported by the U.S. homebuilding data released on Friday that increased to more than a one-year high in January and that building permits soared to their highest level since 2007. A higher-than-expected consumer price growth last week was also cited as tailwind.
The that tracks the dollar against a currency basket was quoted at 89.28 at 11:20 pm ET, up 0.22%.
The greenback has been weakening in recent months, as inflation concerns amid the ideas that U.S. Federal Reserve and other central banks might raise rates were cited as the main reason for the dollar’s underperformance. The U.S. Treasury Secretary Steven Mnuchin suggested last month that a weaker dollar policy by the States could be good given the country’s trade deficit is reaching to a 10-year high.
Gold is sensitive to moves in the dollar and U.S. rates, as a stronger dollar makes gold more expensive for holders of foreign currency, while an increasing U.S. rates increase the opportunity cost of holding non-yielding assets.
Asian equities were mixed in the morning trading session today, with the and the shedding 1.1% and 0.2% respectively, while the gained 0.5%. Mainland Chinese markets are closed for Lunar New Year holiday until Thursday.
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