NEW YORK: Gold slipped on Wednesday after touching its highest level in a month, as a firmer dollar and improving risk appetite trimmed demand for the safe-haven metal. Spot gold was down 0.3% at $4,826.13 an ounce after earlier reaching its highest since March 18, while U.S. gold futures were little changed at $4,850.40. The retreat followed an early rally and left bullion still up 1.6% for the week, underscoring how quickly sentiment has shifted across currency, equity and commodity markets.
Market sentiment improved after indications that talks between the United States and Iran could resume, easing some of the risk aversion that had supported bullion in recent sessions. Asian equities rose to a six-week high, adding to the move into risk assets and reducing immediate demand for defensive holdings. The dollar also recovered some ground after recent declines, making gold more expensive for buyers using other currencies, though the broader currency index remained close to a six-week low.
Gold had jumped about 2% a day earlier as a softer dollar and lower oil prices eased inflation fears and encouraged fresh buying. Wednesday’s pullback reflected a partial reversal of that move rather than a decisive break in the underlying trend. Oil prices remained elevated as disruption to flows through the Strait of Hormuz continued to cloud the energy outlook, a factor that has kept inflation concerns in view and helped preserve a floor under bullion even as haven demand moderated.
Dollar and diplomacy curb haven demand
Interest rate expectations remained a key support for the metal. Traders were pricing about a 29% chance of a quarter-point rate cut by the U.S. Federal Reserve by year-end, up from about 13% a week earlier, according to CME Group’s FedWatch tool. Lower rates tend to support gold because bullion does not pay interest, although that tailwind was offset on Wednesday by stronger appetite for equities and other risk-sensitive assets.
Trading in U.S. gold futures on the COMEX division of CME Group pointed to a market that was consolidating after sharp geopolitical swings rather than extending Tuesday’s rally. The June contract held near $4,850 an ounce as investors balanced softer expectations for U.S. rates against a dollar that had steadied from recent lows. That combination left bullion pinned between renewed macro support from the policy outlook and weaker safe-haven demand as cross-asset sentiment improved.
Rate outlook underpins bullion
Broader financial markets reflected the same recalibration. The dollar index stayed near 98 after falling to its lowest level in six weeks, while stock benchmarks recovered ground as investors watched diplomatic developments and assessed the impact of higher energy costs. For gold, the competing forces were clear: easing geopolitical anxiety reduced the rush into havens, but persistent concerns over inflation, shipping disruption and the path of U.S. monetary policy kept the metal close to record territory.
Other precious metals were firmer, with silver up 0.4% at $79.88 an ounce and platinum also 0.4% higher at $2,112.05, while palladium added 0.1% to $1,588.29. The mixed finish across the complex highlighted a session defined less by a broad retreat in metals than by position adjustment after gold’s run to a one-month peak. By late trade, bullion was below its intraday high but remained near historically elevated levels. – By Content Syndication Services.