Gold Retreats Amid Anticipation of US Inflation Data and Fed Speech
Gold prices retreated on Tuesday after reaching their highest level in more than three months earlier in the session. Spot gold had fallen 0.6% to $4,622.01 per ounce by 13:34 GMT, while US gold futures declined 0.4% to $4,678.10.
Bart Melek of TD Securities attributed the pullback in momentum to gold moving to a strong resistance level around $4,700. The precious metal had risen to $4,696.18 an ounce earlier in the day as investors analyzed the U.S. Treasury's decision to double its bond-buying program.
The market is now awaiting the release of US inflation data on Wednesday and Federal Reserve Chairman Kevin Warsh's first speech on Friday for clearer clues about monetary policy. The CME FedWatch tool indicates that traders currently price in a 38% probability of a U.S. interest rate increase in September, which could dampen demand for gold.
Despite the decline in gold prices, gold-backed exchange-traded funds (ETFs) attracted inflows of 46.7 tons ($6.4 billion) last week, the largest weekly demand in 10 months.