Gold was trading below the previous session’s 10-month peak yesterday as the dollar gained after minutes from the last US Federal Reserve meeting rekindled expectations of another rate hike this year. Investors were also keeping a close eye on talks to end a trade dispute between China and the United States.
Spot gold was steady at $1 338,76 per ounce as of 0753 GMT, having touched $1 346,73 per ounce in the previous session, its highest level since April 19. US gold futures were down 0,5 percent at $1 341,80 an ounce.
“There are both technical and fundamental reasons for this pull back in gold prices. It is under some technical selling pressure at the moment,” said Margaret Yang, market analyst with CMC Markets, Singapore.
“It was a clearly dovish statement by the Fed,” she said adding that the dollar rebounded after the minutes and gold traders are now taking profits.
The dollar index against a basket of six major currencies was up 0,2 percent.
The Fed, in the minutes of its latest meeting in January, said the US economy and its labour market remained strong, prompting some expectations of at least one more interest rate hike this year.
Higher interest rates make gold less attractive since it does not pay interest and costs to store and insure.
Spot gold may retrace into a range of $1 321-$1 331 per ounce and it seems to have peaked around a resistance at $1 351 per ounce, according to Reuters analyst Wang Tao.