Picture: 123RF/RONNARONG THANUTHATTAPHONG
Picture: 123RF/RONNARONG THANUTHATTAPHONG

Bengaluru — Gold prices retreated from a more than two-month high on Tuesday due to an uptick in the dollar, though weaker-than-expected US economic data stoked concerns over recovery and limited losses for the safe-haven metal.

Spot gold was down 0.2% at $1,788.89 an ounce by 4.04am GMT, after hitting its highest since February 25 at $1,797.75 on Monday. US gold futures fell 0.1% to $1,789.40 an 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 an 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 US economy is doing better, but is “not out of the woods yet”, Federal Reserve chair Jerome Powell said on Monday in remarks that flagged an upcoming central bank study.

Data on Monday showed US manufacturing activity grew at a slower pace in April. Investors now await April payrolls data due later this week.

“Slower expansion in US 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 an ounce, after scaling a high of $3,007.73 an ounce on Friday. Silver was down 0.5% at $26.74 an ounce, after hitting its highest since March 1 on Monday, while platinum rose 0.1% to $1,231.46.

Reuters

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