Gold eased $3.40 as traders sold off the metal after its climbed on a new monthly high on Friday as the US dollar returned to its normal trading range. Gold is trading at 1181.20 remaining well above its average trading range for the past 90 days. Gold steadied today, following a three-day rally that pushed it to its highest in two weeks, as a weaker dollar and caution from the Federal Reserve on the timing of a possible hike in U.S. interest rates generated modest investor interest.
European shares fell, also on caution about whether Greece can reach agreement with creditors to secure fresh funds ahead of a meeting between its prime minister and Germanyís Angela Merkel.
Gold is usually seen as an insurance against risk in times of financial or economic troubles when equities underperform. The dollar was down 0.4 percent against a basket of leading currencies. It came under pressure after the Fedís cautious stance on the health of economic recovery in the United States.
Market playersí consensus expectation for a U.S. interest rate increase has shifted, with most of Wall Streetís top banks now expecting the central bank to hold off until at least September, a Reuters poll showed. Traders said that apart from easing demand from jewelers and retailers at existing levels, fall in the precious metal prices overseas mainly kept pressure on prices.
Besides, appreciating rupee against the US dollar at the forex market making imports cheaper influenced the sentiment to some extent, they said
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Source : fxempire