Gold prices fell on Tuesday, clearing previous gained , while traders expects a stronger dollar and earlier cut in US interest rates as the world’s largest economy has been showing signs of improvement. The ongoing political tension in Ukraine and Gaza failed to counter a safe-haven demand.
Gold prices for immediate delivery rose 0.35%, trading at $1,314.00 an ounce at the time of writing, retreating from $1,345.17 on July 10, the highest since March 19. Silver futures traded 0.59% higher to $21.010 an ounce at the same time.
The US dollar was near a four-week high against a basket of 10 major counterparts as the dollar spot index rose 0.01% to 80.5700 at the time of writing. Investors will be focusing on the US Inflation data due later in the day, with analysts expecting to see that the US inflation held at the fastest pace since October 2012, which could persuade the Federal Reserve to tighten its monetary policy.
Gold prices fell 28% last year on speculations that the US Federal Reserve will reduce its monthly asset purchases as the economy strengthens.
Assets in the world’s largest bullion-backed fund, SPDR Gold Trust, came in at 803.34 metric tons on Monday.
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Geopolitical Tensions
The ongoing tensions in the Middle East and Ukraine supported bullion prices rebound 8.7% this year as the US and European Union leaders continue to pressure the Russian President Vladimir Putin after the MH17 Malaysian Airlines flight was shot down by a missile believed to have been supplied by the Russian military.
Meanwhile the US Secretary of State John Kerry held talks with Egyptian leaders on how to call a truce to end the conflict in Gaza as death toll in the country continue to increase.
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