Gold falls as greenback bounces from six-and-a-half-month lows

NEW YORK/LONDON — Gold prices fell on Tuesday, as the US dollar rebounded from six-anda-half-month lows and investors shrugged off heightened political risk following a deadly suicide attack in Britain.

The blast at a concert hall in Manchester, which killed at least 22 people, prompted the US dollar to gain against sterling but failed to move gold higher. A stronger dollar makes bullion more expensive for holders of other currencies. The dollar had fallen sharply against a basket of currencies recently, but rose on Tuesday as some traders booked profits.

“Gold is taking a breather once again; it’s struggling to make it out of this $1,245-$1,265 range,” said Ole Hansen, head of commodities strategy at Saxo Bank.

“Unless we get other developing ( political risk) stories, the market is not prepared to break this range until further guidance from the Federal Open Market Committee,” he said, referring to the US central bank’s policysetting committee.

Spot gold was about 0.70% lower at $1,250.93 an ounce by 3:27 p.m. EDT (1927 GMT), having gained about 3% since May 9 when it tumbled to near a two-month low. US gold futures settled 0.50% lower at $1,255.50 an ounce.

“With nearly two-thirds of Q2 2017 out of the way, QTD gold prices have averaged within 0.20% of our Q2 2017 price forecast ($1257/ oz versus $1259/oz),” RBC Capital Markets said in a note.

“While prices may trade away trough the balance of the quarter, we remain confident in a slight upward skew in prices on average (driven by unanticipated risks).”

Gold has been supported by weakening US economic data and troubles facing US President Donald J. Trump, all of which have weighed on the greenback.

Still, Fed fund futures were up, showing a 75% chance of an interest rate increase next month, which deterred investors from pushing gold higher.

Separately, Wall Street ticked higher as the Trump administration’s budget proposal called for slashing health care programs and boosting military spending.

Among other precious metals, silver was down 0.40% at $17.05 an ounce, having touched a threeweek peak of $17.30 earlier. Platinum fell 0.20% to $944 an ounce after hitting $957.50, its highest level in nearly a month. Palladium rose 0.30% to $772.60 an ounce, having dropped to more than a two-month low in intraday trading on Monday before ending that session up 1.50%, its biggest oneday gain since April 20. —