Gold Steadies Near 1-Week High

Gold steadied on Tuesday, hovering near its highest level in a week with any dip in the dollar likely to spur another round of buying from speculators.

Gold was at $883.10/884.10 an ounce, steady from $883.60/884.80 an ounce late in New York on Monday, when it jumped as high as $894.70 an ounce on a weaker U.S. dollar, still well below a record high of $1,030.80 hit in mid-March.

The dollar fell against the euro and the yen after a media report that Federal Reserve officials believe financial markets have gone too far in their expectations for U.S. interest rate increases.

Oil slipped 2 cents to $134.59 a barrel, after a rally to a record $139.89.
In the physical sector, high gold prices triggered light selling from investors and jewelers in Vietnam and Thailand, but Indonesia, which is Southeast Asia's largest consumer, was on the sidelines.

Premiums for gold bars were steady at 70 U.S. an ounce to the spot London prices in Singapore Gold futures for August delivery on the COMEX division of the New York Mercantile Exchange fell $1.0 an ounce to $885.4.

Dealers awaited Tuesday's release of the May U.S. Producer Price Index, said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.