Gold slips as dollar firms; investors wary ahead of Jackson Hole meet
Gold prices were a touch lower on Tuesday, pressured by an uptick in the dollar, with investors focusing on tensions over North Korea and remaining cautious ahead of an annual central banking meeting in Jackson Hole later this week.
Spot gold had slipped 0.2 percent to $1,288.40 an ounce by 0333 GMT, after rising 0.5 percent in the previous session.
U.S. gold futures for December delivery edged down 0.2 percent to $1,294.20 per ounce.
"The U.S. and South Korea`s military training will probably induce some move from North Korea. I think people are getting ready for any move so that`s why gold came back up yesterday," said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank.
The United States and South Korea began long-planned joint military exercises on Monday, heightening tensions with North Korea, which called the drills a "reckless" step toward nuclear conflict.
"The dollar is a bit stronger and that`s why gold is coming off a bit. People are really kind of cautious about the market with this North Korea and U.S. situation and also the Jackson Hole meet later this week."
The dollar edged up against the yen on Tuesday, while the dollar index, which tracks the greenback against a basket of six major rivals, was steady.
Investors are awaiting the Federal Reserve`s annual central banking conference in Jackson Hole, Wyoming this week for clues on the outlook on monetary policy, with the European Central Bank chief Mario Draghi and Fed Chair Janet Yellen are set to speak.
"Geopolitics are still flashing on trader dashboards and they remain risk averse. The Jackson Hole meeting is the chief event for this, and it is pretty much safe to say that we are very dubious about getting anything new from the meeting, but still traders want to hedge their risk ahead of any unexpected outcome," said Naeem Aslam, chief market analyst at Think Markets.
"We do expect a mammoth move in the gold price if there is any kind of surprise from the ECB or the Fed," Aslam said.
Gold is highly sensitive to rising interest rates because they increase the opportunity cost of holding non-yielding bullion, while boosting the greenback.
Spot gold may retest a support at $1,282 per ounce, as its correction from the Aug. 18 high of $1,300.80 has not completed, said Reuters technical analyst Wang Tao.
Palladium was 0.5 percent lower at $934.00 an ounce after reaching its highest since February 2001 at $940 in the previous session, helped by a rally in industrial metals.
Silver and platinum were up 0.1 percent each at $16.99 and $978.70 an ounce respectively.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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