By Polina Devitt
LONDON (Reuters) – Gold prices fell to a more than two-week low on Tuesday as easing concerns of an escalation in the Middle East crisis triggered profit-taking after a recent rally.
Spot gold fell 1.2% to $2,298.58 per ounce by 0945 GMT. Gold, silver and palladium touched their lowest since April 5 earlier in the session, while platinum hit a three-week low.
“Gold’s aggressive rally since the mid-February low is currently being challenged with bullion suffering a long overdue and relatively aggressive, but healthy correction,” Ole Hansen, head of commodity strategy at Saxo Bank, said.
Gold dipped 2.7% on Monday, which was its biggest intraday fall in 22 months. Its March-April rally drove the precious metal up by almost $400 to an all-time high of $2,431.29 on April 12.
The correction “will help determine the real level of underlying demand besides momentum and managed money accounts … and will reduce longs should the technical and/or fundamental picture change,” Hansen said.
From a technical point of view, the key area of support for gold using Fibonacci retracement levels stands at around $2,255-2,260.
“Holding above this level will send a signal to the market the retracement is nothing but a weak correction within a strong uptrend,” Hansen added.
In a positive development for gold, global physically-backed gold exchange traded funds (ETFs) saw inflows of $104 million last week, according to the World Gold Council.
It was the first weekly net inflow since the end of 2023 as rising holdings in the North American- and Asian-listed funds offset outflows in Europe, it added.
Under pressure from gold’s correction, spot silver fell 1.5% to $26.78 per ounce. Having outperformed gold during the recent rally, it is now retracing faster, Hansen said.
The gold-silver ratio stands at 86 ounces of silver to an ounce of gold compared with 82.5 in mid-April.
Platinum dipped 0.5% to $912.65, and palladium dropped 1.2% to $996.80.
(Reporting by Polina Devitt in London; additional reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Mrigank Dhaniwala)
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