Gold steadies after three days of declines

Bengaluru — Gold prices were steady on Tuesday, after falling for three days as investors opted for riskier assets.

Growing prospects of a US interest rate increase, following strong economic data, were fuelling the risk appetite.

Spot gold was little changed at $1,291.95 an ounce by 4.29am GMT.

US gold futures for August delivery were down 0.1% at $1,295.80/oz.

“There is lack of interest in gold. It is more interesting for equities and people are making profit there, so nobody wants to trade in gold for the time being,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

Wall Street’s three major indices rose on Monday, pushing the Nasdaq to a record closing high as investors bet on a continuation of strong economic growth.

The dollar index, which measures the greenback against a basket of six major currencies, was up 0.1% at 94.080.

“The recent strength in the dollar, amid positive economic data, has kept investor demand (for gold) subdued,” ANZ said in a note.

The stronger than expected US jobs data, released on Friday, fuelled expectation that the Federal Reserve would raise interest rates at its policy meeting starting on June 12.

Higher interest rates boost the dollar, making dollar-denominated gold more expensive for buyers using other currencies, and they reduce investor interest in nonyielding bullion.

“Gold prices are moving in a very tight range. The upside will be between $1,297-$1,298 as the market seems to be waiting for US and North Korean leaders to meet and for the US interest rates to go up, which is all happening next week,” Leung said.

Reuters’ technical analyst Wang Tao says spot gold is still targeting the May 21 low of $1,281.76/oz as its bounce from this level has completed.

North Korean leader Kim Jong-un is preparing for a high-stakes summit with US President Donald Trump in Singapore on June 12.

Meanwhile, concern about global trade lingered after the US imposed metal tariffs on Mexico, Canada and the European Union last week.

“The tariff picture continues to remain quite unsettled, but somewhat surprisingly, is not causing much angst for the various markets…. For now, we remain in a wait-and-see mode on gold, as investors mull which way to take the complex,” INTL FCStone analyst Edward Meir said in a note.

In other precious markets, silver rose 0.3% to $16.41/oz.

Platinum fell 0.3% to $898/oz. It earlier hit a low of $893.45, the lowest since May 22.

Palladium was 0.2% lower at $991.20/oz. The metal rose to a six-week high of $1,010.50 in the previous session.