LONDON. – Gold headed lower yesterday, weighed down by a stronger dollar, and may re-test a seven-month low after a failed attempt to break higher in the previous session.
Spot gold was down 0.3 percent at $1,253.60 an ounce by 1030 GMT, after retreating from its highest since June 26 at $1,265.87 in the previous session.
US gold futures for August delivery were 0.4 percent lower at $1,254 an ounce.
“If this dollar strength continues, we could see another test of $1,240, the lows from last week and mid-December, a crucial technical level,” said Carsten Fritsch, commodity analyst at Commerzbank in Frankfurt.
Bullion has been in a downtrend since touching $1,365.23 on April 11, the strongest in nearly three months.
The dollar’s index against a basket of six major currencies was up 0.2 percent at 94.263 after dropping to its lowest since mid-June on Monday.
A stronger dollar makes greenback-denominated gold more expensive for holders of other currencies. Investors were also on the sidelines awaiting developments on the trade war between China and the United States, said Dick Poon, general manager, Heraeus Metals Hong Kong Ltd. – Reuters