Gold falls as the dollar strengthens
Gold prices edged lower on Tuesday as a stronger US dollar weighed on bullion. Meanwhile, spot gold fell 0.2% to $4,164.45 an ounce, while US gold futures for December delivery slipped 0.1% to $4,187.90.
The dollar remained near its recent 18-month high. As a result, a stronger dollar makes gold more expensive for holders of other currencies.
Investors await US inflation reports
Meanwhile, market attention is focused on US inflation data due this week. The consumer price index is scheduled for Wednesday, followed by the producer price index on Thursday.
In turn, the reports are expected to influence expectations for the Federal Reserve’s next interest-rate decision. Higher-than-expected core inflation could increase the likelihood of a rate hike in October and place additional pressure on gold.
According to CME’s FedWatch tool, markets assigned a 21% probability to a rate increase in October and an 88% probability to a hike in December.
Meanwhile, Cleveland Federal Reserve President Beth Hammack said monetary policy may need to become more restrictive to counter widespread inflation.
Other precious metals also decline
Elsewhere, silver fell 0.5% to $60.51 an ounce. Platinum declined 0.2% to $1,684.63, while palladium slipped 0.5%.
In addition, geopolitical tensions continued to affect sentiment. Saudi Arabia faced attacks linked to Yemen’s Houthi rebels, adding to concerns about the regional conflict and energy prices.
