Gold Retreats Amid Dollar Strength
Gold prices fell on Tuesday after reaching record highs, as the U.S. dollar strengthened due to reduced expectations of Federal Reserve rate cuts this year.
- Spot gold declined by 0.6%, trading at $2,940.10 per ounce, after hitting an all-time high of $2,978.21 per ounce in the previous session.
- U.S. gold futures also dropped by 0.5%, settling at $2,945.60 per ounce.
U.S. Dollar Gains, Pressuring Gold
The U.S. dollar index rose 0.3% to 101.80, making gold more expensive for holders of other currencies. The greenback’s strength came after stronger-than-expected U.S. economic data, which led investors to scale back their bets on a Fed rate cut in 2024.
Stronger Economic Data Reduces Rate Cut Expectations
- Retail sales increased by 0.4% in February, exceeding the market forecast of 0.2%.
- Industrial production also grew by 0.5%, surpassing analyst expectations.
These robust economic figures have weakened expectations that the Federal Reserve will cut interest rates in the near term, putting pressure on gold prices.
Gold’s Outlook Amid Global Uncertainty
Despite the stronger U.S. dollar and fading rate-cut hopes, some analysts believe gold remains supported by concerns over global economic growth and geopolitical tensions.
“Although a strong U.S. dollar and reduced rate cut expectations have weighed on gold, the metal could still find support due to uncertainties in global economic growth and geopolitical risks,” according to analysts at Moneymarketflow.
Performance of Other Precious Metals
- Silver fell 0.9%, trading at $22.15 per ounce.
- Platinum declined 0.7% to $980.50 per ounce.
- Palladium dropped 1.2% to $1,450.00 per ounce.
Gold investors will now turn their focus to upcoming economic data and Federal Reserve signals for further market direction.
