Gold prices edged up in Asia on Tuesday in light trade with investors cautious ahead of a widely expected Fed rate hike in June and prospects for a stronger dollar.
Gold for June delivery on the Comex division of the New York Mercantile Exchange rose 0.14% to $1,228.78 a troy ounce.
Overnight, gold prices traded flat on Monday, as investors ditched safe-haven assets, after Emmanuel Macron sealed a landslide victory over Marine Le Pen in the runoff vote on Sunday.
Gold futures struggled to hold onto gains, as demand for safe-haven assets eased, after centrist Emmanuel Macron won the race to the French presidency, winning 66% of the French vote on Sunday.
The dollar advanced to session highs and weighed on dollar-denominated gold, but downside momentum in the precious metal was capped, as a Macron victory was widely anticipated, after he held a significant lead over Marine Le Pen in the polls during the buildup to the runoff vote on Sunday.
Gold futures failed to mount a recovery, coming off the back of its worst week in 2017, after a strong U.S. jobs report on Friday, pushed treasury yields higher and raised expectations of a June rate hike.
According to investing.com’s Fed rate monitor tool, nearly 80% of traders expect the Federal Reserve to hike interest rates in June, compared to 63% in the previous week. Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
