Gold prices were little changed on Tuesday, after closing lower in three previous sessions, as investors opted for riskier assets amid increasing prospects of a US interest rate hike following strong economic data. Spot gold was flat at $1,291.51 per ounce by 0644 GMT. US gold futures for August delivery were down 0.1 percent at $1,295.60 per ounce.
"There is lack of interest in gold. It is more interesting for equities and people are making profit there, so nobody wants to trade in gold for the time being," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. "The recent strength in the US dollar amid positive economic data has kept investor demand (for gold) subdued," ANZ said in a note.
Higher interest rates boost the dollar, making dollar-denominated gold more expensive for buyers using other currencies, and they reduce investor interest in non-yielding bullion.
"Gold prices are moving in a very tight range. The upside will be between $1,297-$1,298 as the market seems to be waiting for US and North Korean leaders to meet and for the US interest rates to go up, which is all happening next week," Leung added. Spot gold is still targeting the May 21 low of $1,281.76 per ounce, as its bounce from this level has completed, according to Reuters technical analyst Wang Tao.
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