Gold Prices Slip on Profit-Taking as Dollar Recovers

Gold prices slipped on Tuesday after reaching a three-month high earlier in the session. The precious metal was down 0.2% at $4,640.40 per ounce by 1128 GMT. This decline was largely due to profit-taking and a stronger US dollar, which made greenback-priced bullion more expensive for buyers overseas.

According to Saxo Bank analyst Ole Hansen, 'Gold's move today is primarily due to profit taking, with the dollar recouping some of last week's losses that followed the buyback announcement.'

The US Treasury Department recently doubled the size of liquidity support buyback operations for longer-dated notes and bonds, which led to a decline in gold prices. However, Hansen added that 'The reasons why investors are falling back in love with gold again have not gone away and will likely continue to support in the coming months.'

Markets are now looking forward to key events, including the US Personal Consumption Expenditures inflation report on Wednesday and Federal Reserve Chairman Kevin Warsh's debut speech at the annual Jackson Hole symposium on Friday. Traders currently price a 40% chance of a US interest rate hike in September and a 60% chance that the Fed will leave rates unchanged.