Gold prices fell on Wednesday, May 9, as a robust dollar and rising bond yields overwhelmed any geopolitical worries after the United States withdrew from the Iranian nuclear accord.
Dismayed European allies sought to salvage the international nuclear pact with Iran after U.S. President Donald Trump pulled the United States out of the landmark accord.
“The fact that the cat is out of the bag and we have the announcement (on Iran), that has removed some of the
geopolitical support for gold,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
During times of political or economic uncertainty, gold prices often receive a boost as the metal is widely considered a safe-haven asset alongside the dollar and the Japanese yen.
Also weighing on gold, geopolitical tensions in the Korean peninsula continued to ease as U.S. Secretary of State Mike Pompeo arrived in Pyongyang and was expected to return from North Korea with three American detainees.
Spot gold was down 0.5 percent at $1,307.53 an ounce by 0950 GMT after touching its lowest since May 3 at $1,304.11. U.S. gold futures for June delivery shed 0.4 percent to $1,308 per ounce.
“The market instead has returned focus on the two key drivers for gold, which are bond yields and the dollar, and both are pointing the wrong direction from a higher gold perspective,” Hansen added.
A series of U.S. bond auctions this week could further push up yields and pressure gold, running the risk that gold will challenge the key $1,300 support area, Hansen added.
Spot gold may revisit its May 1 low of $1,301.51 per ounce as it failed three times to break resistance at $1,317, said Reuters technical analyst Wang Tao, Reuters reports.
In other precious metals, silver slipped 0.1 percent to $16.41 an ounce, platinum fell 0.2 percent to $910.20
an ounce and palladium added 0.3 percent to $971.97 an ounce.
