By Brijesh Patel
(Reuters) – Gold prices slipped on Wednesday from a three-month peak hit in the previous session due to an uptick in the U.S. dollar, while markets awaited more clarity surrounding reports of Russian-made missiles killing two people in Poland.
Spot gold was down 0.4% at $1,771.17 per ounce as of 0505 GMT, after hitting its highest since Aug. 15 in the previous session.
U.S. gold futures edged 0.1% lower to $1,774.60 per ounce.
Rival safe-haven dollar rose 0.2% against its rivals, making gold more expensive for other currency holders. [USD/]
“Gold is still largely pinned on the Fed… We can see gold is kind of continuing to creep higher since last week’s spike, but it hasn’t really found tremendous follow-through,” said DailyFX currency strategist Ilya Spivak.
“Needless to say, wild card factors can exist like some sort of more aggressive and more immediate escalation in Ukraine, you could see gold become reactive.”
The United States and its NATO allies are investigating the blast that killed two in Poland, but early information suggests it may not have been caused by a missile fired from Russia, U.S. President Joe Biden said. Russia denied it was responsible.
Data on Tuesday showed U.S. producer prices increased less than expected in October, further evidence that inflation was starting to subside.
The data, following last week’s smaller-than-expected increase in consumer prices for October, has lifted hopes that the U.S. Federal Reserve could slow its interest rate hikes going forward.
While gold is used as a safe investment during times of political and financial uncertainty, rising interest rates tend to dull bullion’s appeal as the metal pays no interest.
Among other precious metals, spot silver dipped 0.5% to $21.42 per ounce. Platinum fell 0.5% to $1,009.66 and palladium slipped 0.9% to $2,078.13.
(Reporting by Brijesh Patel in Bengaluru; Editing by Sherry Jacob-Phillips and Janane Venkatraman)
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