Market Analysis

Gold prices retreated on Tuesday as the U.S. dollar strengthened, pulling back from a record high reached in the previous session amidst various bullish factors such as increasing bets on U.S. rate cuts and geopolitical tensions driving safe-haven demand.

As of 0335 GMT, spot gold was down 0.6% at $2,410.73 per ounce, after touching a peak of $2,440.49 on Monday. U.S. gold futures also declined by 1% to $2,414.00.

The dollar edged up 0.1%, reducing the appeal of dollar-denominated gold for buyers using other currencies.

Factors such as lower interest rates and geopolitical instability continue to support gold as a preferred investment choice.

ANZ commodity strategist Soni Kumari noted, "Expectations of interest rate cuts this year have increased following last week's subdued inflation data, while geopolitical risks have also contributed significantly to pushing gold prices to new highs."

China's robust demand for bars and coins in the first quarter, the strongest since 2017, has countered the outflows seen in gold-backed ETFs, bolstering prices.

Over the weekend, Iranian President Ebrahim Raisi tragically perished in a helicopter crash in adverse weather near the Azerbaijan border.

Investors are eagerly awaiting the minutes from the Federal Reserve's recent policy meeting scheduled for Wednesday, along with insights from several Fed officials throughout the week.

Spot silver fell by 1.5% to $31.35 an ounce after hitting an over 11-year peak in the previous session.

"Silver, often seen as a proxy for gold, attracts investors due to robust fundamentals and increasing industrial demand, presenting a more affordable alternative to gold," Kumari added.

Platinum declined by 1.1% to $1,035.15, retracing from its highest level since May 12, 2023, seen on Monday. Palladium also dropped by 1.8% to $1,008.91.

Paraphrasing text from "Reuters" all rights reserved by the original author.