(Bloomberg) -- Gold slipped from near last week’s all-time high as the dollar strengthened, making the precious metal more expensive for most buyers.
Bullion fell as much as 1.2% as the dollar inched up amid speculation investors are buying the US currency for month-end portfolio rebalancing. Gold is still trading near $2,500 an ounce after gaining 1.6% over the prior three sessions.
“The dollar is the trigger that has been brewing all week,” said Ole Hansen, head of commodities strategy at Saxo Bank A/S. “US data has failed to give gold any further lift, so the temptation for traders to book some profit after a long run has been rising.”
Traders are shifting attention to inflation figures due Friday, which may offer clues on how rapidly rates will be cut after Federal Reserve Chair Jerome Powell last week confirmed the “time has come” to ease.
The report is forecast to show the three-month annualized rate of core inflation fell to 2.1%, just above the central bank’s 2% goal. Lower interest rates are often seen as positive for non-interest bearing gold.
The precious metal has surged by more than 20% so far this year, boosted by rate cut expectations and robust purchasing by central banks. It has also been supported by haven demand amid ongoing conflicts in the Middle East and Ukraine.
“A punch to an all-time high last week for gold prices seems to call for a near-term breather,” said Jun Rong Yeap, a market strategist with IG Asia Pte. “We may need to see softer economic data ahead to justify much lower rates, which may see gold prices well-supported.”
Spot gold was down 0.9% to $2,501.79 an ounce at 1:09 p.m. in New York. The Bloomberg Dollar Spot Index climbed 0.3%. Silver, palladium and platinum all declined.
--With assistance from Yvonne Yue Li.
©2024 Bloomberg L.P.
