IV:Gold regains strength after three-day slide as dollar weakens
Investing.com - Gold futures edged higher for the first time in three days on Tuesday, as a broadly weaker U.S. dollar prompted investors to return to the market to seek cheap valuations.
Gains were limited as investors continued to speculate over an earlier-than-expected end to the Federal Reserve’s quantitative easing program.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,437.05 a troy ounce during European morning hours, up 0.2% on the day.
Comex gold prices rose by as much as 1.4% earlier in the session to hit a daily high of USD1,444.15 a troy ounce. Gold futures fell to a two-week low of USD1,418.65 a troy ounce on May 10.
Gold prices were likely to find support at USD1,418.65 a troy ounce, the low from May 10 and near-term resistance at USD1,448.05, the previous session’s high.
Gold futures regained strength as the U.S. dollar weakened against the euro and the yen, as traders took profits following the dollar’s recent gains.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.3% to trade at 83.12.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
The dollar has been buoyed in recent sessions amid growing expectations the Fed will wind down its stimulus program, amid indications of an improving U.S. economic outlook.
On Monday, official data showed that U.S. retail sales unexpectedly rose 0.1% in April.
Gold traders are now looking ahead to a flurry of U.S. economic data later in the week, including reports on industrial production, housing starts, inflation and economic sentiment.
Any improvement in the U.S. economy could scale back expectations for further easing from the Federal Reserve.
Elsewhere on the Comex, silver for July delivery fell 0.25% to trade at USD23.64 a troy ounce, while copper for July delivery tumbled 1.2% to trade at USD3.320 a pound.
Copper futures were under pressure as investors remained concerned over the economic outlook in China. The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
