Gold prices fell on Tuesday, dropping for a second straight session, and pushed the most active gold futures contracts to a two-week closing low, amid prospects of aggressive policy tightening by the Federal Reserve to combat inflation.
A firm dollar weighed on gold prices. The dollar index, which climbed to 104.61, came off that high subsequently, but still remains firm at 104.51, up 0.55% from the previous close.
Easing of Covid-19 restrictions in China helped limit gold’s downside. China halved the length of mandatory quarantine for inbound travelers, in the biggest relaxation of entry restrictions after sticking to a rigid COVID policy throughout the pandemic.
The relaxation of the country’s ‘zero-COVID’ policy came after Beijing and Shanghai reported no new local COVID-19 infections for the first time in months.
Gold futures for August ended lower by $3.60 or about 0.2% at $1,821.80 an ounce.
Silver futures for July ended down by $0.362 at $20.806 an ounce, while Copper futures settled at $3.7740 per pound, gaining $0.0115.
A report from the Conference Board showed U.S. consumer confidence deteriorated to its lowest level in over a year in June. The Conference Board said its consumer confidence index slid to 98.7 in June from a downwardly revised 103.2 in May. Economists had expected the index to drop to 101.0 from the 106.4 originally reported for the previous month.
With the continued decrease, the consumer confidence index fell to its lowest level since hitting 95.2 in February of 2021.
Meanwhile, in a speech at the ECB forum on central banking in Sintra, Portugal, ECB President Christine Lagarde played down fears of a recession in the euro zone.
“We have markedly revised down our forecasts for growth in the next two years. But we are still expecting positive growth rates due to the domestic buffers against the loss of growth momentum,” Lagarde said.
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