NEW YORK: Gold prices fell on Tuesday as a firmer U.S. dollar weighed on bullion in a session marked by thin liquidity. Spot gold was down 0.8% at $4,953.90 an ounce by 0345 GMT, after falling about 1% earlier in the session. U.S. gold futures for April delivery fell 1.5% to $4,972.90.
Trading conditions were muted across Asia as several major markets were shut for Lunar New Year holidays. Markets in China, Hong Kong, Singapore, Taiwan and South Korea were closed on Tuesday, while U.S. markets were closed on Monday for the Presidents Day holiday. The reduced participation left precious metals more sensitive to moves in major currencies during the regional morning.
The U.S. dollar index rose 0.2% against a basket of currencies, increasing the cost of dollar-priced gold for buyers using other currencies. In broader markets, the dollar index was around 97.12 after a small gain, a level closely watched by metals traders because gold often moves inversely to the U.S. currency in short-term trading.
Gold’s decline came as markets also tracked diplomatic developments scheduled in Geneva. U.S. President Donald Trump said on Monday he would be involved indirectly in talks between Iran and the United States over Tehran’s nuclear programme, which were set for Tuesday. Separately, representatives of Ukraine and Russia were scheduled to meet in Geneva on Tuesday and Wednesday for a new round of U.S.-mediated peace talks.
Dollar strength and key data focus
Investors were also focused on U.S. monetary policy signals ahead of the release of minutes from the Federal Reserve’s January meeting, due Wednesday. Market pricing tracked by the CME FedWatch Tool showed expectations centered on a first interest rate cut in June. Gold, which does not pay interest, is often sensitive to shifts in rate expectations because higher interest rates can increase the opportunity cost of holding non-yielding assets.
Gold has traded near the $5,000 level in recent sessions, with analysts pointing to holiday conditions as a factor limiting follow-through in either direction. On Monday, spot gold was down 1.3% at $4,976.37 by late afternoon GMT, while U.S. gold futures for April delivery lost 1% to $4,996.60. Recent U.S. economic releases have delivered mixed signals for the rate outlook, with consumer prices rising less than expected in January while job growth accelerated in the same month.
Other precious metals also slide
Other major precious metals moved lower alongside gold. Spot silver fell 1.6% to $75.33 an ounce, after dropping more than 3% earlier in the session. Spot platinum shed 1.3% to $2,014.08 an ounce, while palladium lost 2.3% to $1,685.48. The declines came during the same low-volume conditions that prevailed across several Asian trading centers.
Market closures were set to continue in some locations, with China’s markets scheduled to remain shut from Feb. 15 through Feb. 23 for Lunar New Year. With participation constrained, traders remained focused on the dollar’s direction and the upcoming Fed minutes for near-term cues. Gold’s latest pullback left spot prices below the week’s range highs, while futures tracked closely, reflecting the same currency-driven pressure in subdued trading. – By Content Syndication Services.