Gold prices fell in European trade on Thursday on track for the third loss in a row, plumbing two-week lows under pressure from the stronger US dollar.
The dollar’s rebound comes as global trade tensions receded, while the odds of a Fed rate cut in May dropped as well.
The Price
Gold prices fell 2.05% today to $3221 an ounce, the lowest since April 15, with a session-high at $3290.
On Wednesday, gold lost 0.9%, the second loss in a row as the dollar muscled up.
Gold surged 5.3% in April, the fourth monthly profit in a row on haven demand as the US-China trade war flared back then.
The Dollar
The dollar index rose 0.4% on Thursday, expanding the gains for the third straight session and scaling a two-week high at 100.03 against a basket of major rivals.
A stronger dollar makes the greenback-denominated gold futures less attractive to holders of other currencies.
Trade Developments
Chinese reports said the US has communicated with China recently to discuss tariffs, with President Donald Trump saying there’s a high probability of reaching a deal with China.
He also pointed to potential trade deals with India, South Korea, and Japan soon, as he seeks to utilize his tariffs to force beneficial results.
US Rates
Several Fed officials don’t believe there’s an urgent need to review monetary policies soon.
According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in May stood at just 8%.
The odds of such a cut in June stood at a healthier 65%.
SPDR
Gold holdings at the SPDR Gold Trust fell 2.87 tons yesterday to a total of 944.26 tons, the lowest since April 9.
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