Gold prices ease off 2-month peak on firm dollar, Powell’s comments

Gold prices ease off 2-month peak on firm dollar, Powell’s comments

Gold prices edged lower on Tuesday, after hitting a more than two-month high in the previous session, as a stronger and optimistic comments from U.S. Federal Reserve Chairman Jerome Powell on the economy weighed on the metal’s safe-haven appeal.

Spot gold was down 0.2 per cent at $1,789.02 per ounce by 0131 GMT. The metal touched its highest since Feb. 25 at $1,797.75 on Monday. U.S. gold futures fell 0.2 per cent to $1,788.80 per ounce.

The dollar index was up 0.1 per cent against its rivals, making gold more expensive for other currency holders.

The U.S. economy is doing better, but is “not out of the woods yet,” Powell said on Monday in remarks that flagged an upcoming central bank study documenting the disproportionate blow suffered by the less educated and working parents during the coronavirus downturn.

U.S. manufacturing activity grew at a slower pace in April, restrained by shortages of inputs as rising vaccinations against Covid-19 and massive fiscal stimulus unleashed pent-up demand.

The Bank of Canada‘s signal that it may begin hiking interest rates before the Federal Reserve has lit a fire under the Canadian dollar, but past tightening cycles show faster liftoff may not be sustained.

South Korea’s consumer inflation accelerated to a near four-year high in April, mainly due to a low base in 2020 and rising oil and agricultural prices. Data from the Asian country is a closely watched indicator as it is considered a bellwether for global trade.

More than 153.02 million people have been reported to be infected by the novel coronavirus globally and 3,344,235 have died, according to a Reuters tally.

Palladium rose 0.2 per cent to $2,976.83 per ounce, after scaling an all-time high of $3,007.73 per ounce on Friday. Silver was down 0.5 per cent at $26.74 per ounce, while platinum dipped 0.1 per cent to $1,228.94.

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