Abbie WestfallGold slipped from close to last week’s all time high as the dollar strengthened, making the precious metal more expensive for most buyers.
Bullion fell as much as 1,1 percent as the dollar inched up amid speculation investors are buying the US currency for month-end portfolio re-balancing. Gold is still trading near US$2 500 an ounce after gaining 1,6 percent in the prior three sessions.
“The dollar is the trigger that has been brewing all week,” said Ole Hansen, head of commodities strategy at Saxo Bank A/S. “
US data has failed to give gold any further lift, so the temptation for traders to book some profit after a long run has been rising.”
Traders are shifting attention to inflation figures due Friday, which may offer clues on how rapidly rates will be cut after Federal Reserve Chair Jerome Powell last week confirmed the “time has come” to ease policy.
The report is forecast to show the three-month annualised rate of core inflation fell to 2,1 percent, just above the central bank’s 2 percent goal.
Lower interest rates are often seen as positive for non-interest bearing gold.
The precious metal has surged by more than 20 percent so far this year, boosted by rate cut expectations and robust purchasing by central banks. It has also been supported by haven demand amid ongoing conflicts in the Middle East and Ukraine.
“A punch to an all-time high last week for gold prices seems to call for a near-term breather,” said Jun Rong Yeap, a market strategist with IG Asia Pte.
“We may need to see softer economic data ahead to justify much lower rates, which may see gold prices well-supported.”
Spot gold was down 1 percent to US$2 498,36 an ounce at 1:23 p.m. in London.
The Bloomberg Dollar Spot Index climbed 0,4 percent.
Silver, palladium and platinum declined. — Bloomberg
Bongani Ndlovu