Gold prices continue to slide as sentiment improves
Investing.com - Gold prices moved lower for a second consecutive session on Tuesday, as tensions between the U.S. and North Korea appeared to subside and as the greenback strengthened subsequently.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were down 0.73% at $1,281.04, the lowest since August 9 after hitting a two-month peak of $1.298.10 on Friday.
The December contract ended Monday’s session 0.28% lower at $1,290.40 an ounce.
Futures were likely to find support at $1,265.90, the low of August 9 and resistance at $1,296.40, Monday’s high.
Demand for the safe-haven precious metal weakened after North Korea said on Tuesday it had delayed a decision on a plan to fire missiles at the U.S. Pacific territory of Guam while it watches U.S. actions a little longer.
At the same time, South Korean President Moon Jae-in said there will be no military action upon the Korean peninsula without Seoul's consent and that the government would prevent war by all means.
Market participants were also looking ahead to U.S. retail sales data, to be released later Tuesday, for further indications on the strength of the economy after disappointing inflation figures on Friday dampened expectations for another rate hike by the Federal Reserve this year.
The greenback found some support after New York Fed President William Dudley said on Monday that he favored another interest rate hike this year if the economic conditions evolved in line with his expectations.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.30% at 93.62, the highest since August 10.
Gold is sensitive to moves higher in both U.S. rates and the dollar. A stronger dollar makes gold more expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion.
Elsewhere in metals trading, silver futures for September delivery tumbled 1.43% to $16.878 a troy ounce, while copper futures for September delivery eased up 0.09% to $2.907 a pound.
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