Gold prices jumped to nearly a four-week peak in the previous session, providing a glimmer of hope for investors seeking shelter from market turbulence. But that optimism lasted only until Tuesday, when a stronger United States dollar and renewed global trade worries pushed the precious metal back down.
Investor sentiment turned cautious again, particularly with important data and geopolitical updates.
Spot gold fell by 1.1 percent to $3,340.79 an ounce by 10:21 a.m. ET, dropping from its previous peak — the highest since May 8. U.S. gold futures fell 0.9% to $3,365.90.
The drop came as the dollar index (.DXY) was up 0.5%, rebounding from a one-month low. A strengthening dollar tends to make gold more expensive for buyers who do not use the currency and typically acts to depress demand.
Even with Tuesday's slip, gold is still up almost 28 percent for the year. The metal remains a trusted haven amid inflationary pressures and geopolitical tension.
Silver fell 1.2% to $34.37 an ounce but still remained near a seven-month peak hit recently. Platinum slipped 0.4 percent, to $1,059.32, while palladium gained 1.4 percent, to $1,003.10.
Gold has shown huge sensitivity to changes in politics and central-bank expectations. Traders are on edge this week awaiting a possible phone conversation between U.S. President Donald Trump and Chinese President Xi Jinping.
Trump shocked the world with his latest accusations aginst China for reneging on a past pledge to roll back tariffs, fueling fears that trade tensions could return to the fore.
Further clouding the outlook was an announcement by the European Commission, which said it planned to challenge Washington's most recent tariff plans. Meanwhile, Trump suggested doubling tariffs on steel and aluminum, which could heighten trade friction with trade partners.
"Market conditions are going through the summer slow period," said David Meger, director of metals trading at High Ridge Futures. "That, extending as well with trade jitters, could mean gold continues to trade sideways unless we see a big catalyst."
Investors are also awaiting important U.S. economic updates this week. All eyes are on Friday's nonfarm payrolls report and on remarks from several Federal Reserve officials. Analysts say September could be an inflection point for rate cuts, which would normally be supportive for gold.
