Gold prices ease as firm US dollar weighs

Gold prices ease as firm US dollar weighs

Gold edged lower on Tuesday as the dollar strengthened, with expectations that prices in the near-term could retest bullion's resistance at the key $2,000 per-ounce level.

Spot gold was down 0.2% at $1,975.36 per ounce, as of 0623 GMT. U.S. gold futures slipped 0.4% to $1,978.40. Gold climbed to an over one-month high of $1,998.10 on Monday, buoyed by safe-haven demand, as the Ukraine crisis dragged on and inflation concerns mounted.

However, the metal later gave up most gains as the dollar and U.S. 10-year Treasury yields strengthened. "That ($2,000 per ounce) is quite a critical level, and the fact that gold effectively closed flat on the day means there appears to be a slight hesitancy to push immediately higher," said City Index's senior market analyst Matt Simpson. "Gold has the ability to overcome the U.S. dollar strength and break above $2,000 possibly over the next week or so."

The dollar firmed to its highest since April 2020 as investors braced for multiple half a percentage-point rate hikes from the Federal Reserve as it seeks to rein in soaring inflation. While bullion is considered a safe store of value during times of political and economic crises, as well as a hedge against inflation,