Gold dips as dollar firms, investors eye US fiscal woes, rate signals
KUALA LUMPUR: Gold prices slipped on Tuesday as the dollar regained some lost ground, while persistent concerns over the US fiscal outlook and anticipation of key economic data kept investors cautious about the interest rate trajectory.
Spot gold was down 0.50 per cent at US$3,325.99 an ounce, as of 0537 GMT. Markets in the US and London were closed on Monday for a holiday.
US gold futures fell 1.20 per cent to US$3,325.70.
"At this point, we are seeing some consolidation in gold prices. The market is taking a breather and waiting for the next catalyst," said Kelvin Wong, a senior market analyst, Asia Pacific at OANDA.
"However, market participants are concerned about the widening of that US budget deficit that is a supporting factor for gold prices and that is also driving a dollar weakness as well."
The dollar index, meanwhile, rose against its rivals after hitting a near one-month low in the previous session, making greenback-priced gold less attractive for other currency holders.
The US House of Representatives last week passed a version of US President Donald Trump's tax-cut bill that is calculated to add about US$3.80 trillion to the federal government's US$36.20 trillion in debt over the next decade, according to the Congressional Budget Office.
Meanwhile, Trump backed away from his threat to impose 50 per cent tariffs on imports from the European Union next month, restoring a July 9 deadline to allow for talks between Washington and the 27-nation bloc to produce a deal.
Investors' focus this week will also be on speeches from a slew of Federal Reserve policymakers and Friday's US core Personal Consumption Expenditures price index, for interest rate clues.
Fed funds futures traders see the US central bank as most likely resuming rate cuts in September.
Elsewhere, spot silver fell 0.70 per cent to US$33.12 per ounce, platinum slipped 0.60 per cent to US$1,078.68 and palladium dropped 0.80 per cent to US$979.50.
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