The spot gold price rebounded, posting slight gains during Asian trading hours on Tuesday on a softer US dollar.
Spot gold was last at $1,213.50-1,213.80 per ounce, up $0.90 from Monday’s close. Trading ranged at $1,208.50-1,214.50 so far.
The yellow metal had fallen to a 3.5-month low of $1,199.90 on Monday after the US dollar index climbed to a fresh two-month high of 95.96 on the same day.
The US dollar index eased 0.19 percent to 95.55 so far on Tuesday.
Initial support for gold is at the crucial $1,200-level, while initial resistance is at the sharp short-term downtrend which comes in around $1,214/15, said MKS Group on Tuesday morning.
There is the short-term potential for the gold price to fall below $1,200 due to the high level of speculative interest and renewed Fed rate hike speculation, said Commerzbank in a report on Friday.
But the price is not expected to fall lastingly below this threshold because such a price level is likely to be viewed by investors as an attractive opportunity to buy, it added.
The US dollar had gained strength since the Federal Open Market Committee (FOMC) released its hawkish April meeting minutes which displayed US economic optimism increasing throughout the policy-board.
That sentiment was echoed by Yellen on Friday, which she assumed a rebound from sub-one percent first quarter growth. In such a scenario, “probably in the coming months such a move [rate hike] would be appropriate,” Yellen said during an interview at Harvard University, which triggered a surge in the US dollar.
With the Fed decision still very much data dependent, US economic numbers released this week – including inflation and payrolls data – will be important.
US core PCE price index, CB consumer confidence, personal spending, personal income, S&P/CS composite-20 HPI, Chicago PMI are due later on Tuesday, with ISM manufacturing PMI to follow on Wednesday and blockbuster jobs report coming up on Friday.
Investors will also be focusing on China’s May manufacturing PMIs due on Wednesday to gauge the strength of Chinese economic recovery, which has so far appeared tepid following weaker-than-expected April economic data.
In other commodities, the Brent crude oil spot price rose 0.28 percent to $50.23 per barrel, while the Texas light sweet crude slipped 0.06 percent to $49.51 recently on Tuesday.
In equities, the Shanghai Composite gained 2.07percent to 2,880.93 so far on Tuesday.
In other precious metals, silver fell $0.04 to $16.145/16.165. Platinum was up $8 to $977/982, and palladium gained $10 to $543/548 recently on Tuesday.
On the Shanghai Futures Exchange, gold for December delivery was unchanged at 258.80 yuan per gram and December silver was flat at 3,596 yuan per kilogram.
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Source: Bullion Desk News
