Spot Gold edged lower on Tuesday, as a firmer US Dollar and investor optimism regarding a potential ceasefire between Russia and Ukraine weighed on the safe-haven allure of the metal.
Yesterday US President Donald Trump spoke with Russia’s President Vladimir Putin and announced Russia and Ukraine would immediately begin negotiations aimed at a ceasefire.
The US Dollar Index was last up 0.10% to 100.402.
A firmer dollar makes dollar-priced Gold less appealing to international investors holding other currencies.
Meanwhile, Moody’s lowered US’ top sovereign credit rating by one notch (from Aaa to Aa1) last week, as the agency cited concerns over the country’s rising debt. The downgrade placed Moody’s assessment in line with the other major credit rating firms.
Several Federal Reserve officials are expected to make speeches later in the day, with market participants looking for more insight into macroeconomic conditions and the Fed’s future policy trajectory.
About 54 basis points of Fed rate cuts by year-end are now priced in, as early as October.
Spot Gold was last down 0.62% on the day to trade at $3,210.29 per troy ounce.
“We are seeing buyers emerge on dips below $3,200. However, I think we are due a bigger pullback, especially if there’s further easing in geopolitical risks and we see upward pressure on yields building from U.S. fiscal policy,” Capital.com’s financial market analyst Kyle Rodda was quoted as saying by Reuters.
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