Gold Prices Slip Lower as Dollar Strength Weighs

Investing.com – Gold prices edged lower on Tuesday as strength in the dollar continued to act as a headwind for the precious metal.

for June delivery on the Comex division of the New York Mercantile Exchange dipped $1.90 or 0.14% to $1,312.20 a troy ounce by 04:31 AM ET (08:31 AM GMT).

Last week prices fell to their lowest levels in two months and posted a third consecutive weekly decline.

The , which measures the greenback’s strength against a basket of six major currencies, was up 0.3% to 92.89, its highest level of the year.

A stronger dollar tends to hurt demand for gold and other dollar-denominated commodities, making them more expensive for overseas buyers.

Rising U.S. Treasury yields and broadly solid economic data have boosted the dollar in recent weeks, underlining expectations for a steady pace of interest rate increases by the Federal Reserve this year.

The central bank has projected two more increases for the year, but some investors expect three more.

Last week’s Fed statement acknowledged a recent pick-up in inflation, leaving it on track to deliver its second rate increase of the year when it meets in June.

Expectations for a faster pace of rate hikes tend to be bearish for gold, which struggles to compete with yield bearing assets when interest rates rise.

Investors were keeping an eye on geopolitical developments, ahead of an announcement by U.S. President Donald Trump later in the day about the future of an with Iran, which he has repeatedly threatened to withdraw from.

In other precious metal trade, edged down to $16.48, while were down 0.35% to $910.10.

Among base metals, shed 1.17% to trade at $3.044 a pound.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.