Gold eases as firmer dollar outweighs support from rate-cut bets
Shafaq News/ Gold prices edged lower on Tuesday following a slightrecovery in the dollar, although losses were capped by investor optimism forimminent U.S. rate cuts and lingering concerns about the Middle East crisis.
Spot gold was down 0.4% to $2,507.96 per ounce, as of 0238 GMT. Priceshave risen more than 21.5% this year, hitting a record high of $2,531.60 onAug. 20.
U.S. gold futures fell 0.5% to $2,543.20.
The dollar index edged higher against its rivals, making gold lessattractive for other currency holders.
A September U.S. rate cut has been set in stone, but the debaterevolving around its size may prompt a wait-and-see mode as investors lookforward to upcoming economic data to anchor their views, said IG marketstrategist Yeap Jun Rong.
Traders see a 70% chance of a 25-basis-point (bp) rate cut and about 30%probability of a bigger 50-bp reduction, according to the CME FedWatch tool,opens new tab.
A low interest rate environment tends to boost non-yielding bullion'sappeal.
San Francisco Federal Reserve President Mary Daly said aquarter-percentage point cut in borrowing costs next month was likely.
"We expect the upward trend for gold prices to persist, given itspositive performance in past Fed rate-easing cycles, healthy central bankdemand and its status as a good hedge against geopolitical and economicrisks," Yeap said.
Residents of Lebanese cities felt only partial relief on Monday that oneof the biggest exchanges of fire between armed group Hezbollah and the Israelimilitary the previous day was over, worn down by the relentless tension of 10months of conflict.
Among other metals, spot silver edged 0.1% higher to $29.93 per ounce,platinum fell 0.5% to $957.55 and palladium rose 0.1% to $959.90.
(Reuters)
