(Reuters) – Investors have been waiting for U.S. economic data later this week that could destabilize the Federal Reserve’s stance on rate hikes, while a strong dollar has pushed the U.S. dollar back. Gold prices fell on Tuesday as they countered support from lower US Treasury yields.
Spot gold fell 0.1% to $1,986.04 an ounce by 9:55 am EDT (1355 GMT), while US gold futures fell 0.2% to $1,996.80.
The dollar gained 0.4%, making bullion more expensive for buyers holding other currencies and pushing benchmark 10-year Treasury yields down.
“The Fed will do its best to keep rates higher to keep inflation in check, but that will likely constrain economic growth,” said Everett Millman, chief market analyst at Gainesville Coins. said.
“Whatever decision they have to make, it will probably lead to some kind of stress, and that looming uncertainty will certainly make money sensitive.
The US consumer confidence index fell to 101.3 in April, down from 104 last month and below market expectations of 104.
The core Personal Consumption Expenditure (PCE) index, the Fed’s favorite inflation indicator, is due to be released on Friday, while quarterly gross domestic product data is due for release on Thursday.
The market sees an 84% chance of a 25 basis point rate hike at the Fed’s May 2-3 meeting.
Gold is considered a safe haven in an uncertain economy, but rising interest rates dull the luster of the non-yielding metal.
Traders also recalled US Treasury Secretary Janet Yellen warning that Congress’ failure to raise the government’s debt ceiling would spell an “economic catastrophe” that would push interest rates higher for years to come. investigated.
China, the top consumer of gold, reported an increase in domestic production in the first quarter.
Silver fell 1.7% to $24.74 an ounce, platinum fell 0.5% to $1,076.54 and palladium fell 2.8% to $1,492.63.
Reported by Arundhati Sarkar, Bengaluru.Edited by Sherry Jacob Phillips
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