By Sherin Elizabeth Varghese
(Reuters) – Gold prices fell to a more than two-week low on Tuesday amid easing concerns of an escalation in the Middle East crisis and profit-taking, while investors awaited key U.S. data for fresh clues on the Federal Reserve’s interest rate trajectory.
Spot gold fell 0.8% to $2,308.85 per ounce, as of 0820 GMT, after hitting its lowest since April 5 earlier in the session. U.S. gold futures slipped 1% to $2,322.10.
“Gold has been the recipient of different types of buying flows in recent months, and now one of those flows has slightly dried up with safe-haven demand receding. Investors are seeing this as an opportunity to lock in some profits after gold’s recent (strong) run,” said Tim Waterer, chief market analyst at KCM Trade.
Gold dipped more than 2% on Monday, its biggest intraday fall in over a year, as fears of a wider regional conflict eased after Iran said it had no plan to retaliate following an apparent Israeli drone attack.
The sharp decline in gold prices overnight “may have also tripped weak longs, in turn fuelling an even larger decline,” Singaporean bank OCBC said in a note.
The U.S. GDP data on Thursday and Personal Consumption Expenditures (PCE) print on Friday will be on investors’ radar this week.
“If these happen to produce a beat to the upside we could see a further extension of the wait for interest rate relief. Such a scenario could cause the gold price to take a larger step back,” Waterer said.
Higher interest rates reduce the appeal of holding non-yielding gold.
March headline PCE is likely to increase 0.3%, unchanged from the previous month, and a year-on-year gain of 2.6%, compared with a 2.5% increase in February, according to a Reuters poll.
Spot silver fell 1% to $26.93 per ounce, platinum dropped 0.1% to $916.10, and palladium dipped 0.5% to $1,003.50.
(Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Rashmi Aich, Sherry Jacob-Phillips and Eileen Soreng)
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