By Carla Mozee, MarketWatch
LOS ANGELES (MarketWatch) — Gold futures gained in electronic trade Tuesday, with a pullback in the U.S. dollar against key rivals allowing the precious metal to catch a break after three straight sessions of declines.
Gold for June delivery GCM3 +0.25% rose $3.40, or 0.3%, to $1,438.10 an ounce during Asian trading hours.
Dollar-denominated gold found relief as the greenback fell, weighing on the ICE dollar index DXY -0.13% , which measures the U.S. dollar’s moves against six other major currencies. The U.S. dollar stepped back from gains against the Japanese yen, and softened against the euro ahead of the release of economic reports from Europe.
Prices for gold and other dollar-denominated commodities tend to rise when the dollar weakens, as it makes them less expensive for holders of other currencies.
Gold prices on Monday fell $2.30, or 0.2%, on the Comex division of the New York Mercantile Exchange as the dollar strengthened and as investors weighed a report indicating the U.S. Federal Reserve is preparing to bring current monetary stimulus to an end.
The Fed has mapped out a plan for winding down its program of buying $85 billion in bonds each month, according to a report in The Wall Street Journal late Friday.
Tapering the Fed’s bond-buying program would make the U.S. dollar more attractive in terms of yield, analysts have said. Also, the easy monetary policy tends to raise the risk of inflation, and gold is seen as a hedge against inflation.
In other metals action Tuesday, silver for July delivery SIN3 -0.15% was flat at $23.68 an ounce, while copper for July delivery HGN3 -1.19% slipped 4 cents, or 1.2%, to $3.32 a pound.
June palladium PAM3 +0.65% rose $5.30, or 0.7%, to $724 an ounce and July platinum PLN3 +1.31% rose $11.40, or 0.8%, to $1,495.80 an ounce. A report released Monday by Johnson Matthey showed that supplies of both metals swung to a deficit last year.
