Spot gold may test resistance at $1,802 per ounce, a break of which could lead to a gain to $1,816.(File Photo)
Spot gold may test resistance at $1,802 per ounce, a break of which could lead to a gain to $1,816.(File Photo)

Gold retreats from 2-month high as US dollar weighs

  • Spot gold was down 0.4% at $1,785.26 per ounce by 0925 GMT, after hitting its highest since Feb. 25 at $1,797.75 on Monday.
Reuters |
PUBLISHED ON MAY 04, 2021 03:41 PM IST

Gold prices on Tuesday retreated from the previous session's more than two-month high on a stronger dollar ahead of a slew of U.S. economic data, while palladium held firm near record highs hit last week on supply concerns.

Spot gold was down 0.4% at $1,785.26 per ounce by 0925 GMT, after hitting its highest since Feb. 25 at $1,797.75 on Monday.

Carlo Alberto De Casa, chief analyst at ActivTrades, said technical factors were curbing strength in gold, while "the U.S. dollar's recovery is making it more complicated".

"We have two important support levels at $1,765 and $1,750, while a clear surpass of $1,800 would open up space for bullion."

The dollar index rose 0.5% as investors weighed chances that U.S. interest rates will be forced higher by a roaring U.S. economic recovery. An expensive dollar makes gold less attractive for other currency holders.

The U.S. central bank wants to keep monetary policy loose for the foreseeable future, but the economic recovery gaining pace has fanned speculation of a pull-back in support sooner than expected.

Higher interest rates increase the opportunity cost of holding non-yielding bullion.

Investors are now awaiting U.S. services data due on Wednesday and April payrolls data on Friday for further clues on the U.S. economy's health.

Spot gold may test resistance at $1,802 per ounce, a break of which could lead to a gain to $1,816, according to Reuters technical analyst Wang Tao.

Elsewhere autocatalyst metal palladium was up 0.7% at $2,991 per ounce after scaling an all-time high of $3,007.73 on Friday.

Silver was down 0.2% at $26.89, after hitting its highest since March 1 on Monday, while platinum rose 0.4% at $1,235.50.


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