Last Update: May 01, 2023, 23:55 IST
The dollar index gained 0.5%, making dollar-denominated bullion less attractive to foreign buyers. (Representative Image/AP)
Spot gold was down 0.3% at $1,983.29 an ounce as of 12:45 p.m. EDT (1645 GMT), reversing the nearly 1% gains it made earlier in the session.
Gold prices edged lower on Monday as the dollar edged up after better-than-expected US manufacturing data, while markets await a rate hike decision from the Federal Reserve this week.
Spot gold was down 0.3% at $1,983.29 an ounce at 12:45 p.m. EDT (1645 GMT), reversing the nearly 1% gains it made earlier in the session.
US gold futures were down 0.4% at $1,991.90.
US manufacturing fell to a three-year low in April as new orders picked up slightly and employment improved, while investment in non-residential structures lifted construction spending more than expected in March.
Jim Wyckoff, senior analyst at Kitco Metals, said stronger-than-expected data dragged the metals market lower and slightly lifted the dollar.
The dollar index gained 0.5%, making dollar-denominated bullion less attractive to foreign buyers. [USD/]
Earlier in the US session, gold prices touched as high as $2,005 as traders took stock of news that JPMorgan Chase & Co will buy most of First Republic Bank’s assets after regulators seized the troubled lender over the weekend.
“This move was certainly premature … We made some use of that opportunity and attempted to close some positions on the upside,” said Philip Streibel, chief market strategist at Blue Line Futures in Chicago.
The Federal Open Market Committee (FOMC) meeting will be held on May 2-3 and the markets are broadly expecting an interest rate hike of 25 basis points.
Investors will also focus on Fed Chair Jerome Powell’s press conference to assess whether recent remarks amid banking turmoil and impending recession threats push back market expectations of a rate cut before the end of the year. Yes or No.
While gold is known as an inflation hedge, rising rates reduce demand for zero-yield bullion.
Spot silver fell 0.4% to $24.93 an ounce, platinum fell 1.8% to $1,055.11, while palladium fell 2.8% to $1,458.90.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
