Gold dips on profit taking after touching seven-week high

Gold prices edged down from the highest levels in almost seven weeks on Tuesday as the dollar rose and investors locked in profits from bullion`s rally last month.

Spot gold dipped 0.1 percent to $1,267.52 per ounce by 0945 GMT. It rose 2.2 percent last month, its biggest monthly gain since February.

U.S. gold futures for August were unchanged at $1,266.60 per ounce.

"In the short term there are technical indications that gold is overstretched, and when we`ve had a move of nearly three weeks of straight gains there`s danger of profit taking," said analyst Jonathan Butler at Mitsubishi in London.

At its peak on Monday, gold had gained about $66 since rebounding from a near four-month low of $1,204.45 on July 10.

The dollar edged up against a trade-weighted currency basket on Tuesday, but held close to a 14-month low as investors added to bets that political turmoil in Washington will hit prospects of another Federal Reserve rate hike in coming months.

A firmer dollar makes commodities such as gold that are priced in the greenback more expensive to buyers outside of the United States.

Butler said despite any short-term correction, gold was poised to move higher.

"Yesterday for the first time on a monthly close, gold broke above a downtrend that had prevailed since the high in 2011. This is quite a bullish technical signal and potentially demonstrating the start of a new trend."

Political instability in the United States after President Donald Trump ousted recently hired White House communications chief Anthony Scaramucci on Monday could support gold in coming months, Butler added.

Gold is often used as an alternative investment during times of political and financial uncertainty.

Investors are also looking ahead to the U.S. non-farm payrolls data later this week and how that will affect the dollar, according to Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

In other precious metals, silver rose 0.1 percent to $16.79 per ounce. It hit an over one-month high in the previous session and rose 1.3 percent in July.

Palladium gained 0.6 percent to $888.50 per ounce, after it hit a near seven-week high of $897.05 in the previous session. It rose almost 5 percent in July.

Platinum climbed 0.6 percent to $941.40 per ounce, after rising to $943.80, the highest since June 14. It rose almost 5 percent in July, in what was its first monthly gain since February.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)