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Gold futures fluctuate on dollar strength, equity gains

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Investing.com - Gold futures swung between modest gains and losses in rangebound trade on Tuesday, as the U.S. dollar strengthened against the yen and as Japan's Nikkei stabilized following extreme volatility in recent sessions.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,389.85 a troy ounce during European morning hours, up 0.2% on the day.

Comex gold prices held in a tight USD10-range between USD1,385.85 a troy ounce, the daily low and a session high of USD1,395.95 a troy ounce.

Gold futures were likely to find support at USD1,337.85 a troy ounce, the low from May 20 and resistance at USD1,413.05, the high from May 22.

Comex floor trading, which was closed for Monday's U.S. Memorial Day holiday, will resume Tuesday.

Gold prices struggled for upside traction due to a broadly stronger U.S. dollar, as dollar-priced commodities become more expensive to investors holding other currencies when the greenback gains.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.25% to trade at 83.95.

Demand for the dollar continued to be underpinned by expectations that the Federal Reserve is moving closer to scaling back its USD85 billion-a-month asset purchase program.

Last week, the minutes from the U.S. central bank's May meeting showed that a "number" of policymakers were prepared to taper bonds purchases as soon as June.

Moves in the gold price this year have largely tracked shifting expectations as to whether the Fed would end its bond-buying program sooner-than-expected.

Meanwhile, in Japan, the Nikkei moved higher for the first time in five sessions, dampening the safe-haven appeal of the precious metal.

Gold's appeal as a safe-haven asset was boosted in recent sessions, with investors buying into the precious metal as Japanese stocks sold off sharply amid volatility in the Japanese bond market.

Elsewhere on the Comex, silver for July delivery shed 0.3% to trade at USD22.43 a troy ounce, while copper for July delivery eased up 0.2% to trade at USD3.302 a pound.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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