Gold ended a touch higher on Tuesday, recovering from session lows as buying increased after the dollar softened against the euro...
Gold ended a touch higher on Tuesday, recovering from session lows as buying increased after the dollar softened against the euro following disappointing U.S. economic data.
Gold was at $884.20/885.40 an ounce by New York's last quote at 2:15 p.m. EDT, against $883.60/884.80 an ounce late in New York on Monday.
The precious metal came under pressure in earlier trade as traders took profits after a strong session on Monday, when gold had risen to an intraday high of $894.70 an ounce on the weaker dollar.
A dip in crude prices after Monday's record highs dampened sentiment toward the precious metal, which is often bought as a hedge against oil-led inflation.
"If oil prices are poised for a potential fall, players are going to hold back from buying gold in anticipation of that," said Fairfax IS analyst John Meyer.
Crude slipped after Monday's all-time high of $139.89, as investors took profits ahead of a meeting of oil producers and consumers in Saudi Arabia this weekend. U.S. crude futures ended down 60 cents at $134.01 a barrel.
However, the market was still supported by weakness in the dollar. The U.S. currency slipped against the euro on Monday as U.S. housing starts fell and after in-line producer price inflation numbers.
The data was interpreted as reducing the chances of an early U.S. rate hike from the Federal Reserve.
A softer dollar typically benefits gold, which is often bought as an alternative investment to the U.S. currency.
However, uncertainty remained over the future path of the dollar, which has fluctuated over the last week as investors debate the likelihood of rate hikes.
James Steel, metals analyst at HSBC in New York, told clients in a note that a flattening U.S. Treasuries yield curve signals a stronger U.S. dollar in the longer term, and that could weigh on gold prices.