Gold sheds over 1% on speculation of US interest rate rise

The price of gold fell by over 1% on Tuesday as a stronger dollar and persistent speculation about a US interest rate rise dragged the shiny precious metal well below the $1,200 an ounce level.

Gains in the dollar, which has benefited from anticipation of a US rate hike, continue to weigh on gold. Tuesday’s slide began early in Asian trading after US Federal Reserve’s Jeffrey Lacker reiterated his call for the central bank to consider hiking interest rates in June, and saying there was “no shame” in adjusting them lower again if economic data demanded it.

Subsequently, European trading marked a fifth session of losses in six for Gold.

At 15:20 BST, COMEX gold for June delivery was trading down 1.15% or $13.80 at $1,185.50 an ounce, retreating from a short-lived spike. Spot price was down 0.71% or $8.53 to $1,190.35.

Augustin Eden, analyst at Accendo Markets, said: “Despite considerable geopolitical worries which traditionally boost safe haven demand, gold continues to struggle as the dollar strengthens.”

Jasper Lawler, market analyst at CMC Markets, also felt a stronger dollar was getting in the way of a climb. “Since pulling off the lows in March, gold has been setting up for a break higher towards $1,300 an ounce, but a move above $1,225 has become difficult simply because of recent strength in the US dollar.

Elsewhere in the precious metals sphere, COMEX silver fell 1.2% to $16.10 an ounce, while spot platinum lost 0.04% to $1,153.63 an ounce.