Globally, gold prices dropped, as dollar grew stronger on Tuesday, February 21, as investors awaited more clues on the timing of any U.S. interest rate hikes in a series of speeches by Federal Reserve officials this week.
Spot gold fell 0.5 percent to $1,232.31 per ounce by 0338 GMT, while US gold futures also fell 0.4 percent to $1,233.60 an ounce.
The dollar index rose 0.3 percent to 101.22. “US economic data is currently the driving force behind gold,” Heraeus Metal Management said in a note. “Fed chief Janet Yellen recently signaled that the US economy was prepared for an early increase in key interest rates.
Spot gold may break a support at $1,233 per ounce and head towards the support at $1,226, according to Reuters technical analyst Wang Tao.
Bullion is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while also boosting the dollar. Investor appetite has shown signs of easing since gold hit a three-month high on Feb. 8.
The world’s largest gold-backed exchange-traded fund, SPDR Gold Shares reported an outflow of 2.4 tonnes on Friday, the first in nearly four weeks.
Data also showed on Friday that speculators cut their net long position in COMEX gold for the first time in three weeks in the week to Feb. 14. bGold prices have risen about 7 percent this year.