Gold languished near a one-month low on
Tuesday, as a stronger dollar diminished bullion’s appeal and
investors remained wary of aggressive interest rate hikes by the
U.S. Federal Reserve.
Spot gold was flat at $1,736.43 per ounce, as of 0655
GMT, after hitting its lowest since July 27 at $1,727.01 on
U.S. gold futures held ground at $1,749.10.
“Concerns that Fed Chair Jerome Powell will deliver a
hawkish message at the Jackson Hole Symposium alongside a
recession warning has seen the U.S. dollar surge and weigh on
the yellow metal,” said Matt Simpson, a senior market analyst at
“A clear indication that gold investors are concerned is
that the CBOE gold volatility index and downside protection –
via put options – are both on the rise. I’m on guard for further
losses and for gold’s potential to fall to $1,700.”
The dollar erased earlier losses and gained 0.2%,
attempting to breach a two-decade high hit in July. A stronger
dollar makers gold more expensive for buyers holding other
Rapid Federal Reserve rate hikes since March and hawkish
comments on further tightening have dented bullion’s appeal as
an inflation hedge. Gold prices have fallen more than $300 since
scaling above the key $2,000-per-ounce level in early March.
Powell will address the annual global central banking
conference in Jackson Hole, Wyoming, on Friday, a highly
anticipated speech that could signal how high U.S. borrowing
costs may go.
Fed funds futures are now pricing in a 56.5% chance of a
75-basis-point rate hike in September. Higher
interest rates increase the opportunity cost of holding
On the technical front, spot gold may test a resistance at
$1,744 per ounce, a break above which could lead to a gain to
$1,759, according to Reuters technical analyst Wang Tao.
Elsewhere, spot silver fell 0.7% to $18.88 per ounce,
platinum slipped 0.8% to $868.50, while palladium
climbed 0.8% to $2,012.36.
(Reporting by Brijesh Patel in Bengaluru; Editing by Sherry
Jacob-Phillips and Subhranshu Sahu)