Spot gold falls nearly 2% as dollar firms, Fed rate cut hopes fade
Gold prices dropped over 1% on Tuesday, marking a tenth consecutive session of decline. This slide was driven by a stronger U.S. dollar and diminished expectations for imminent Federal Reserve interest rate cuts. The precious metal reached its low...
By Reuters | Updated:
Reuters
Gold prices fell more than 1% on Tuesday, extending their slide to a tenth straight session, pressured by a firm U.S. dollar and fading hopes for near-term Federal Reserve interest rate cuts.
Spot gold fell 1.6% to $4,335.18 per ounce, as of 0227 GMT. The metal fell to its lowest level since November 24 on Monday.
U.S. gold futures for April delivery fell 1.6% to $4,336.10.
The dollar strengthened, making greenback-priced bullion more expensive for holders of other currencies. [USD/]
Prices are down "as markets continued to drive up interest rates, reasoning that the war in Iran will drive inflation. That global central banks will turn more hawkish as a result has been pushing gold lower," said Ilya Spivak, head of global macro at Tastylive.
Spot gold prices have fallen about 18% since the U.S.-Israeli war on Iran started on February 28, with the dollar emerging as one of the clearest safe-haven winners.
On Monday, Iran denied any negotiations with the United States after President Donald Trump postponed a threat to bomb Iran's power grid, citing what he described as productive talks with unnamed Iranian officials.
A Pakistani official and a second source told Reuters that direct talks to end the conflict could take place in Islamabad as early as this week.
Oil prices held above $100 a barrel after Tehran denied it had discussed ending the Middle East war with Washington. [O/R]
Higher crude prices tend to fuel inflation by pushing up transport and manufacturing costs. Although rising inflation typically boosts gold's appeal as a hedge, high interest rates weigh on demand for the non-yielding asset.
Meanwhile, investors trimmed bets on a December Fed rate hike to roughly 13%, from just above 25% in the prior session, according to CME Group's FedWatch. [FEDWATCH]
For gold, the immediate support levels are at $4,275 and $4,000, while the resistance is seen at $4,650 and $4,840, said Spivak.
Spot silver lost 2.9% to $67.11 per ounce. Spot platinum fell 2.1% to $1,842.30 and palladium shed 2.1% at $1,403.76.
Spot gold fell 1.6% to $4,335.18 per ounce, as of 0227 GMT. The metal fell to its lowest level since November 24 on Monday.
U.S. gold futures for April delivery fell 1.6% to $4,336.10.
The dollar strengthened, making greenback-priced bullion more expensive for holders of other currencies. [USD/]
Prices are down "as markets continued to drive up interest rates, reasoning that the war in Iran will drive inflation. That global central banks will turn more hawkish as a result has been pushing gold lower," said Ilya Spivak, head of global macro at Tastylive.
Spot gold prices have fallen about 18% since the U.S.-Israeli war on Iran started on February 28, with the dollar emerging as one of the clearest safe-haven winners.
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On Monday, Iran denied any negotiations with the United States after President Donald Trump postponed a threat to bomb Iran's power grid, citing what he described as productive talks with unnamed Iranian officials.
A Pakistani official and a second source told Reuters that direct talks to end the conflict could take place in Islamabad as early as this week.
Oil prices held above $100 a barrel after Tehran denied it had discussed ending the Middle East war with Washington. [O/R]
Higher crude prices tend to fuel inflation by pushing up transport and manufacturing costs. Although rising inflation typically boosts gold's appeal as a hedge, high interest rates weigh on demand for the non-yielding asset.
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Meanwhile, investors trimmed bets on a December Fed rate hike to roughly 13%, from just above 25% in the prior session, according to CME Group's FedWatch. [FEDWATCH]
For gold, the immediate support levels are at $4,275 and $4,000, while the resistance is seen at $4,650 and $4,840, said Spivak.
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Spot silver lost 2.9% to $67.11 per ounce. Spot platinum fell 2.1% to $1,842.30 and palladium shed 2.1% at $1,403.76.
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