Spot Gold pulled back from a 1-month high on Tuesday, weighed down by a firmer US Dollar, while markets continued to assess the impact of an escalating Middle East conflict.
The US Dollar held near a more than five-week high, underpinned by firm demand and cautious market sentiment. A firmer dollar makes dollar-priced Gold less appealing to international investors holding other currencies.
“Inflationary concerns are proving to be of benefit to the dollar while being of some hindrance to the gold price,” KCM Trade chief market analyst Tim Waterer was quoted as saying by Reuters.
“Gold would arguably be trading higher than current levels were it not for dollar appreciation since the conflict intensified.”
A senior official from the Islamic Revolutionary Guard Corps said the Strait of Hormuz had been closed and warned that Iran would fire on any vessel attempting to pass through the strategic waterway, Reuters reported. The Strait of Hormuz is a crucial route for nearly one-fifth of global oil shipments.
In terms of macro data, this week’s focus will likely set on US labor market data prints, including the ADP employment, weekly jobless claims and the key Non-Farm Payrolls reports.
Spot Gold was last down 0.48% on the day to trade at $5,296.65 per troy ounce.
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