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Gold prices plunges as dollar recovers

 

Gold prices gave up early gains to trade slightly lower on Tuesday as the U.S. dollar recovered.

Spot gold was down 0.1 percent at $1,256.79 an ounce, as of 0709 GMT, after touching its highest since June 26 at $1,265.87 in the previous session.

U.S. gold futures for August delivery were 0.2 percent lower at $1,257.40 an ounce.

According to the National Australia Bank Economist, John Sharma, the main driver was the dollar.

“Geopolitical issues such as Britain’s confused exit from the European Union and U.S. President Trump’s assertion that China was impeding North Korean progress on denuclearisation have provided some support for gold,” said Sharma.

The dollar’s index against a basket of six major currencies was up 0.04 percent at 94.114 after dropping to its lowest since mid-June on Monday.

Investors were also on the sidelines awaiting developments on the trade war between China and the United States, said Dick Poon, general manager, Heraeus Metals Hong Kong Ltd.

Last week, the world’s top two economies, U.S and China slapped tit-for-tat duties on $34 billion worth of each other’s imports.

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