Gold prices edged lower in Asian trading on Tuesday, weighed down by a strengthening U.S. dollar and growing uncertainty over the Federal Reserve’s next policy decision following Chair Jerome Powell’s hawkish comments last week.
By 01:58 ET (06:58 GMT), spot gold was down 0.4% at $3,986.10 per ounce, while U.S. gold futures slipped 0.5% to $3,994.30. The metal once again failed to hold above the $4,000 level as the dollar extended its rally, making bullion more expensive for international buyers.
Gold Pressured by Dollar Strength and Fed Ambiguity
The U.S. dollar climbed to a three-month high on Monday against major peers, supported by fading expectations of another interest rate cut this year.
Powell signaled last week that the central bank was not yet committed to further easing, saying a December rate move was “not a foregone conclusion.” As a result, investors have dialed back bets on near-term monetary loosening.
Uncertainty was compounded on Monday when several Fed officials offered differing perspectives on the economic outlook. Some highlighted the ongoing need to guard against inflation, while others warned that the labor market is beginning to cool.
The divergence in views deepened doubts about when the Fed might resume rate cuts, keeping the dollar well-supported.
Gold, which pays no interest, generally loses its appeal in environments of high interest rates or a strong dollar. The prospect of fewer rate cuts and elevated real yields has continued to dampen investor appetite for the precious metal.
Still, analysts noted that downside risks for gold remain limited amid ongoing fragility in U.S.-China trade relations. While recent signs of progress between Washington and Beijing have reassured investors, renewed concerns over restrictions on advanced chip exports have tempered optimism.
Metal Markets Follow Gold Lower
Other precious and industrial metals also retreated as the stronger dollar weighed on sentiment.
Silver futures dropped 1.5% to $47.315 per ounce, while platinum futures fell 1.3% to $1,557.85 per ounce.
On the London Metal Exchange, benchmark copper futures slipped 1.3% to $10,705.20 per ton, and U.S. copper futures mirrored the move, falling 1.3% to $4.99 per pound.
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