May 04, 2021
Gold slips from two month peak as dollar regains footing
(Reuters) - Gold prices retreated from a more than two-month high on Tuesday due to an uptick in the dollar, although weaker-than-expected U.S. economic data stoked concerns over recovery and limited losses for the safe-haven metal.
Spot gold was down 0.2% at $1,788.89 per ounce, after hitting its highest since Feb. 25 at $1,797.75 on Monday.
U.S. gold futures fell 0.1% to $1,789.40 per ounce.
"The reversal in the dollar is weighing on gold a bit, we've seen the dollar strengthen despite the Feds near-term dovish rhetoric," said DailyFX currency strategist Ilya Spivak.
"On the top side, immediate resistance for gold lies at $1,800 per ounce. If we can break that, we open the door for $1,850 or $1,875 as a follow on levels in the immediate."
The dollar index rose 0.2% against its rivals, making gold less attractive for other currency holders.
The U.S. economy is doing better, but is "not out of the woods yet," Federal Reserve Chairman Jerome Powell said on Monday in remarks that flagged an upcoming central bank study.
Data on Monday showed U.S. manufacturing activity grew at a slower pace in April. Investors now await April payrolls data due later this week.
"Slower expansion in U.S. manufacturing reinforces expectations that central banks, including the Federal Reserve, will keep interest rates near zero," Avtar Sandu, senior commodities manager at Phillip Futures, said in a note.
Lower interest rates decrease the opportunity cost of holding non-yielding bullion.
Palladium rose 0.2% to $2,977.63 per ounce, after scaling an all-time high of $3,007.73 per ounce on Friday.
Silver was down 0.5% at $26.74 per ounce, after hitting its highest since March 1 on Monday, while platinum rose 0.1% to $1,231.46.