Gold slips for third session
Gold prices dipped for a third straight session on Tuesday, retreating further from the key $2,000 mark, with investors turning towards higher-risk assets as banking turmoil subsides, although a softer dollar limited losses.
Spot gold was down 0.2 per cent at $1,951.80 per ounce, as of 0924 GMT. US gold futures fell 0.1 per cent to $1,952.10. Last week, gold breached the $2,000 level after bank contagion fears bolstered safe-haven flows.
European stocks extended their recovery as investors hoped that the banking crisis will be contained after a buyout deal for the failed Silicon Valley Bank.
Gold is under pressure as calm has returned to the market after the recent developments in the banking sector, thereby lifting riskier assets, said Ole Hansen, head of commodity strategy at Saxo Bank.
In the near-term, gold prices could slip to $1,933, but the outlook for gold remains bullish with fast approaching peak in US rates and a danger of hitting a recession in coming months, Hansen added.
Markets are expecting a 48.7 per cent chance of the Federal Reserve maintaining rates at the current range in May, according to the CME FedWatch tool. Last week, the Fed indicated it was on the verge of pausing further rate hikes.
"Near-term the focus remains on the financial market turmoil and how US economic data evolves, which influences the monetary policy of the Fed," UBS analyst Giovanni Staunovo said.
"We target a price of $2,050/oz (for gold) by year-end."
Limiting gold's losses, the dollar index was down 0.1 per cent, making bullion a more attractive bet.
Spot gold may break the resistance at $2,070 per ounce in the second quarter and rise towards $2,148, according to Reuters technical analyst Wang Tao.
Silver fell 1 per cent to $22.87 per ounce, platinum lost 0.6 per cent at $965.57, and palladium dipped 0.3 per cent at $1,404.47.
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