Gold futures settled lower on Tuesday as the dollar firmed up against other currencies amid likelihood of a hike in interest rates sometime in the foreseeable future.
US Treasury Secretary Janet Yellen said in an interview that the Federal Reserve may have to hike interest rates to keep the economy from overheating.
The dollar’s strength was also due to comments from Fed Chairman Jerome Powell who said U.S. economic outlook has clearly brightened amid faster vaccination rates and fiscal stimulus.
He however, cautioned that the economy is “not out of the woods yet.”
“While the recovery is gathering strength, it has been slower for those in lower-paid jobs,” Powell said at a National Community Reinvestment Coalition event on Monday.
The dollar index rose to 91.40 by noon, and despite paring some gains subsequently, was up 0.32 per cent at 91.25 a little while ago. The yield on 10-year U.S. Treasury Notes moved higher as well, adding to the pressure on the yellow metal.
Gold futures for June ended down 15.80 dollars or about 0.9 per cent at 1,776.00 dollars an ounce, after having surged up 1.4 per cent on Monday.
Silver futures for July closed lower by about 0.402 cents or 1.5 per cent at 26.558 dollars an ounce, after rising more than 4 per cent in the previous session. Copper futures for July settled at 4.5215 dollars, down 0.0070 cents or 0.2 per cent from the previous close.