Gold extended losses on Tuesday, pressured by easing geopolitical tensions in Iran and Russia, as well as a stronger dollar, with investors awaiting the minutes of the January FOMC meeting due later this week.
Spot gold dropped 0.8% to $4,953.90 per ounce, after losing 1% earlier in the session. US gold futures GCcv1 for April delivery lost 1.5% to $4,972.90 per ounce.
“It [gold] is not really going very far because it doesn’t look like the [geopolitical] risk is really expanding beyond very much,” said Ilya Spivak, head of global macro at Tastylive.
“Those FOMC minutes and some insight into the Federal Reserve thinking are probably going to be important indicators (for prices).”
US President Donald Trump said on Monday that he would be involved “indirectly” in talks between Iran and the US over Tehran’s nuclear programme set for Tuesday in Geneva, adding he believed Tehran wanted to make a deal.
Meanwhile, representatives of Ukraine and Russia will meet in Geneva on Tuesday and Wednesday for a fresh round of US-mediated peace talks that the Kremlin says will likely focus on territory.
The US dollar index rose 0.2% against a basket of currencies, making greenback-priced bullion more expensive for holders of other currencies.
Investors are awaiting the minutes of the Federal Reserve’s January meeting, due Wednesday, for further clues about monetary policy going forward, and currently expect the first interest rate cut to be in June, according to CME’s FedWatch Tool.
Non-yielding bullion tends to do well in low-interest-rate environments.
“The immediate range top [for gold] is somewhere around $5,120, but the next real kind of objective here is back to the highs at $5,600 or so, and then of course, we march to record highs,” Spivak added.
Meanwhile, spot silver fell 1.6% to $75.33 per ounce, after dropping over 3% earlier.
