Gold prices finished higher in Tuesday trade but encountered late pressure from the U.S. dollar, which rallied after remarks from a Federal Reserve official pointed to a September interest-rate hike.
Lockhart becomes the second Fed official in as many days to endorse a September rate hike after St. Louis Fed President James Bullard told The Wall Street Journal on Monday that he was in favor of a move at the Sept. 16-17 meeting.
Gold stumbled to the close, paring gains after Lockhart’s remarks, stumbling to the close of trade.
Gold for December delivery the most actively traded contract on Comex gained $1.30 cents, or less than 0.1%, at 1,090.70 an ounce, after closing at $1,089.40 an ounce Monday.
A rate hike is likely to weigh on buyers of dollar-denominated commodities like gold. Higher rates increases the return on dollar deposits, which makes it more appealing to currency traders. The ICE U.S. Dollar Index jumped higher after Lockhart’s remarks, moving from about 97.39 to 97.88.
However a strong greenback can dampen the appeal of dollar-denominated gold to buyers in other currencies.
In other metals, September silver picked up 4 cents, or 0.3%, to finish at $14.56 an ounce. October platinum lost $8.60, or nearly 1%, at $958.50 an ounce, after finishing at $967.10 an ounce in Monday trade.
September palladium is down $4.60, or about 1%, at $598.60 an ounce after finishing at $603.20 an ounce in Monday’s session.
Meanwhile, high-grade copper added a penny to settle at $2.36 a pound from $2.35 a pound in the previous session.
Source : MarketWatch