Gold prices retreated on Tuesday as a stronger US dollar and higher US Treasury yields dampened demand for the precious metal, while investors awaited the release of minutes from the US Federal Reserve’s June policy meeting for clues on the direction of interest rates.
Spot gold fell 0.9% to US$4,127.59 an ounce, while August COMEX gold futures eased 0.7% to US$4,139.50 after bullion touched a two-week high a day earlier.
According to Reuters, the US dollar strengthened while benchmark 10-year Treasury yields climbed to a two-week high, making non-yielding assets such as gold less attractive. Markets are also looking to the Federal Open Market Committee minutes due on Wednesday for further guidance on monetary policy under Federal Reserve Chair Kevin Warsh.
RHB Investment Bank Bhd maintained its bearish technical view on COMEX gold, saying the commodity’s rebound to US$4,167.50 on Monday was rejected by the 20-day simple moving average, signalling that selling pressure remains intact. The research house said traders should retain short positions unless prices break above the US$4,400 resistance level.
RHB identified immediate support at US$4,000 followed by US$3,700, while resistance stands at US$4,400 and US$4,650.
Reuters reported that traders now see a 56% probability of a US interest rate hike in September, down from more than 60% before weaker-than-expected US jobs data last week. Higher interest rates typically reduce the appeal of gold as it does not generate interest income.
Elsewhere, spot silver fell 1.6% to US$61.10 an ounce, platinum slipped 0.9% to US$1,617.20 and palladium declined 1.3% to US$1,251.61.
