Precise Investors Editorial Team
Spot gold declined 1.9 per cent to $4,898.53 per ounce, after hitting $4,862 per ounce earlier, its lowest in more than a week
Gold dropped more than 2 per cent on Tuesday, as holidays in some markets hit liquidity, while easing geopolitical tensions and a stronger dollar added to the pressure.
Spot gold declined 1.9 per cent to $4,898.53 per ounce by 0622 GMT, after hitting $4,862 per ounce earlier, its lowest in more than a week. U.S. gold futures for April delivery shed 2.6 per cent to $4,917.70 per ounce.
Thin liquidity with the holidays in the last 24 hours, especially in China and Asia, but also obviously in the United States too, means we just lacked a bid in the market, said Kyle Rodda, senior market analyst at Capital.com.
Mainland Chinese, Hong Kong, Singapore, Taiwan and South Korea markets are closed for the Lunar New Year holidays. U.S. markets were closed on Monday for Presidents’ Day.
The U.S. dollar index gained 0.2 per cent against a range of currencies, making dollar-priced bullion more expensive for holders of other currencies.
The minutes of the U.S. central bank’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.
Spot silver dropped 2.8 per cent to $74.46 per ounce, after declining more than 5 per cent earlier.
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