NEW YORK: Gold prices fell 1% on Tuesday, weighed down by a stronger dollar and an uptick in bond yields, while investors looked forward to more US economic data this week that could influence the Federal Reserve’s policy stance.
Spot gold was down 1% at $1,944.09 per ounce by 10:33 a.m. ET (1433 GMT), while US gold futures dropped 1.4% to $1,943. “Gold prices are softening as we see movement higher in the US dollar. There is also some profit taking ahead a nonfarm payroll report in the week,” said Edward Moya, senior market analyst at OANDA.
The dollar index rose 0.5% to a three-week high against its rivals, making gold more expensive for other currency holders. Benchmark US 10-year Treasury yields climbed above 4%.
Data on Tuesday showed US job openings fell to the lowest level in more than two years in June, but remained at levels consistent with tight labour market conditions.
Meanwhile, US manufacturing appeared to stabilize at weaker levels in July amid a gradual improvement in new orders. The focus now shifts to the key US nonfarm payrolls report for July due on Friday. Overall payrolls are forecast to rise by 200,000 jobs in July after increasing by 209,000 in June.
Gold ended July with 2.5% gains - its biggest monthly increase in four months- driven by hopes that major global central banks are nearing a peak with interest rate hikes amid signs of slowing inflation.
“I think the Fed are going to skip rate hike in the next meeting if we see inflation come down ... gold prices could be range bound in the near-term, but it will eventually go higher to above $2,000 per ounce,” Moya said. Higher interest rates increase the opportunity cost of holding non-yielding bullion. Elsewhere, spot silver fell 2.1% to $24.24 an ounce, platinum fell 2.6% to $924.24 and palladium dropped 3.9% to $1,232.45.
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