Spot gold was down 0.7% to $2,311.07 per ounce by 9:09 a.m. ET (1309 GMT) after earlier hitting its lowest since April 5
Gold prices extended losses for a second day to hit a more than two-week low on Tuesday as diminishing fears about an escalation of tensions in the Middle East prompted investors to book profits ahead of key U.S. economic data this week.
Spot gold was down 0.7% to $2,311.07 per ounce by 9:09 a.m. ET (1309 GMT) after earlier hitting its lowest since April 5. Bullion’s March to April rally drove it up by nearly $400 to an all-time high of $2,431.29 on April 12.
Israeli strikes intensified across Gaza on Tuesday in some of the heaviest shelling in weeks, but with fears of a wider conflict receding after Iran said last week it had no plan to retaliate following an apparent Israeli drone attack, financial markets showed signs of sharper appetite for risk.
That has meant gold, traditionally seen as a haven from risk, has lost ground, said Julia Khandoshko, CEO at European broker Mind Money.
The market is also closely monitoring signals from the U.S., where inflation data and statements from the Federal Reserve indicate that interest rates may not be cut in June, Khandoshko said.
Recent remarks from Fed officials hinted at no urgency to cut rates, reducing the appeal of non-interest paying bullion. Traders now expect the first Fed rate cut to come most likely in September.
The market will keep a tab on U.S. GDP data due on Thursday and the Personal Consumption Expenditures (PCE) print on Friday for more clues on the health of the economy and the timing of cuts.
Khandoshko added that overbought gold was also witnessing a technical correction.
Elsewhere, spot silver fell 0.6% to $27.04. Autocatalyst metals platinum dipped 1.4% to $904.60, and palladium dropped 1.2% to $996.43.
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Source: Zawya
