Gold edges lower, market focus turns to OPEC
Gold edged lower on Tuesday as the U.S. dollar steadied, with markets on edge ahead of a meeting this week that could see oil producers curb output.
Spot gold was down 0.36 % at $1,189.10 an ounce by 0334 GMT. It gained 0.9 % in the previous session.
U.S. gold futures were 0.2-% lower at $1,188.50 per ounce.
"People will be likely watching the OPEC meeting. If the meeting leads to higher oil prices, that should have some inflationary pressure across the global economies, especially the U.S. and that could lead to lower gold prices," said Barnabas Gan, analyst at OCBC Bank in Singapore.
Oil prices fell early on Tuesday on doubts over a meaningful output cut during Wednesday`s meeting.
Gold edged lower in early trade on a firm U.S. dollar, said MKS PAMP Group trader Jason Cerisola.
The dollar index, which measures the greenback against a basket of currencies, was steady at 101.390.
Gold prices have fallen over $140 an ounce from their post-U.S. election peak on Nov. 9 after a surge in U.S. Treasury yields had sent the dollar to its highest in nearly 14 years.
Global growth will pick up faster than expected in the coming months as the U.S. President-elect Donald Trump administration`s planned tax cuts and public spending fire up the U.S. economy, the
Organisation for Economic Cooperation and Development said on Monday (OECD).
Also weighing on bullion was a highly anticipated U.S. interest rate hike in December by the Federal Reserve, which is due to next meet on Dec. 13-14.
"The probability of a rate hike is 100 %. Market watchers are looking for a hike and that`s why prices are so weak - under $1,200," OCBC`s Gan said.
Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.
Elsewhere, political uncertainties ahead of the upcoming Italian referendum kept the euro in check.
The European Central Bank (ECB) is due to decide next week on whether to extend beyond March its 1.74-trillion-euro bond-buying programme with President Mario Draghi`s comments remaining firmly focused on stimulating growth.
Hedge funds and money managers again cut their net long positions in COMEX gold and silver contracts in the week to Nov. 22, U.S. Commodity Futures Trading Commission data showed on Monday.
Silver fell 0.5 % to $16.54 an ounce.
Palladium dropped 0.35 % to $753.25 and platinum slipped 0.14 % to $921.40.
(Reporting by Apeksha Nair in Bengaluru; additional reporting by Nallur Sethuraman; Editing by Richard Pullin and Joseph Radford)