Gold slides over 2% on strong dollar in light liquidity trade
- Spot gold dropped 1.9% to $4,898.53 per ounce
- Spot silver fell 2.8% to $74.46 per ounce
- Spot platinum dropped 2% to $2,000.27 per ounce
Gold dropped more than 2% on Tuesday, as holidays in major markets hit liquidity, while easing geopolitical tensions and a stronger dollar added to the pressure.
Spot gold dropped 1.9% to $4,898.53 per ounce by 0622 GMT, after hitting $4,862 per ounce earlier, its lowest in more than a week.
US gold futures for April delivery lost 2.6% to $4,917.70 per ounce.
Mainland Chinese, Hong Kong, Singapore, Taiwan and South Korea markets are closed for the Lunar New Year holidays. US markets were shut on Monday for Presidents’ Day.
US and Iran set for high-stakes nuclear talks in Geneva as threat of war looms
The US dollar index rose 0.2% against a basket of currencies, making greenback-priced bullion more expensive for holders of other currencies.
The minutes of the Federal Reserve’s January meeting, due Wednesday, could give investors further clues about monetary policy. The market currently expects the first of three interest rate cuts for the year to be in June, according to CME’s FedWatch Tool.
“Now it’s going to be interesting to see what these FOMC minutes say in the sense that the markets want many more rate cuts now than what the Fed said that it would do,” said Ilya Spivak, head of global macro at Tastylive. Non-yielding bullion tends to do well in low-interest-rate environments.
On the geopolitical front, US President Donald Trump said Monday he would be “indirectly” involved in US–Iran nuclear talks in Geneva on Tuesday, while Ukrainian and Russian representatives will also meet there this week for US-mediated peace discussions.
Iran foreign minister met IAEA chief ahead of nuclear talks
“The immediate range top (for gold) is somewhere around $5,120, but the next real kind of objective here is back to the highs at $5,600 or so, and then of course, we march to record highs,” Spivak said.
Spot silver fell 2.8% to $74.46 per ounce, after dropping over 5% earlier.
Spot platinum dropped 2% to $2,000.27 per ounce, while palladium lost 2.4% to $1,682.23.
Comments