Gold Prices Edge Lower on Firmer Dollar

On Wednesday, gold prices edged lower weighed down by gains in the dollar and improving risk appetite which dampened safe haven demand for bullion.

For June delivery, Gold futures on the Comex division of the New York Mercantile Exchange were down $1.70 cents or 0.13% to $1,347.90 a troy ounce by 04:33 AM ET (08:33 AM GMT).

The measure of the greenback’s strength against a basket of six major currencies, which is U.S. dollar index, which was up 0.17% to 89.37. A stronger dollar makes dollar-denominated commodities, including gold, more expensive for holders of other currencies.

As concerns over trade friction between the U.S. and China and tensions in the Middle East subsided, risk appetite returned to markets .

Stronger market sentiment soused safe haven demand for gold, which is often sought by investors as a store of value during times of market turmoil and political tensions.

The precious metal was also held in check by the prospect higher interest rates.

Recent Federal Reserve and U.S. economic data speakers have continued to point to two or three more rate hikes this year, a negative for gold as the precious metal, which does not pay interest, struggles to compete with yield-bearing assets when rates rise.

In other precious metal trade, platinum futures gained 0.69% to trade at $946.50, while silver futures were up 0.32% to $16.84 a troy ounce.

Among base metals, copper futures added on 1.02% to trade at $3.112 a pound./investing.com

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