Gold holds onto gains despite dollar bounce
-Gold prices traded flat on Tuesday, but remained close to one-month highs, despite upbeat economic data and rate hike chatter from Federal Reserve officials.
Gold prices shrugged off a bounce in the dollar, as jitters concerning Trump’s ability to push through his pro-growth economic agenda provided investors with a reason to seek refuge in the yellow metal, which is considered a safe haven asset.
Gold for April delivery on the Comex division of the New York Mercantile Exchange traded roughly flat at $1,255.65 a troy ounce by 13:27 EDT.
The yellow metal continued to hold firm, despite a surge in consumer confidence data to a nearly seventeen-year high, after The Consumer Board Consumer Confidence Index, hit 125.6, far above expectations of a 114 print.
Meanwhile, comments from Federal Reserve officials concerning interest rate hikes continued to surface as both Chicago Fed President Charles Evans and Dallas Federal Reserve Bank President Robert Kaplan on Monday, suggested that the U.S. central bank would continue on its monetary tightening cycle.
Gold is sensitive to moves in U.S. interest rates, which lift the opportunity cost of holding non-yielding assets such as gold, while boosting the dollar in which it is priced.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, gained 0.23% to 99.26 by 13:22 EDT.
Silver futures added 0.77% to $18.248, a troy ounce while copper tacked on 1.52% to trade at $2.672.
Platinum lost 1.05% to $962.15 while Natural Gas traded 1.15% higher to $3.167.