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Gold sinks as investors ditch safe-haven trade

Investing.com -

Investing.com - Gold prices edged lower on Tuesday, despite a slump in the dollar, as investors continued to favour riskier assets for the second straight day.

Gold dropped to its lowest level in two-weeks, as risk on sentiment continued to dominate asset flows, after recent polls pointed to an easy victory for pro-EU candidate Emmanuel Macron in the runoff vote for the French presidency, scheduled for May 7.

Gold for June delivery on the Comex division of the New York Mercantile Exchange dipped $11.66, or 0.91%, to $1,265.85 a troy ounce by 13:50 EDT.

Gold failed to capitalize on a broad based dollar selloff, as the dollar index fell for a second straight day pressured by a strong rally in the euro.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, fell by 0.29% to 98.62 by 13:46 EDT.

Meanwhile the release of mixed U.S. economic data failed to stem the slump in gold prices , as new U.S. home sales rose to an eighth-month high in March while consumer confidence fell in April.

New U.S. home sales surged to an eight month high in March, which added to the narrative of a strengthening U.S. economy.

The Consumer Confidence Index dropped to 120.3 in April, compared to expectations of a fall to 122.5 for the month.

The decline in gold prices came amid a rally in U.S. treasury yields as investors' expectations grew that the Federal Reserve was poised to increase its benchmark rate in June.

The yield on the benchmark U.S. 10-Year traded higher at 2.314, up 1.74%.

According to investing.com's Fed rate monitor tool, nearly 63% of traders expect the Fed to hike interest rates in June, compared to 33.7% the previous week.

Gold is sensitive to moves in U.S. interest rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.

Elsewhere, platinum fell 0.30% to $957.30 while silver futures dipped 1.61% to $17.64 a troy ounce.

Natural Gas lost 0.60% to $3.141 while copper rose 1.05% to $2.592.

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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.


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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