Gold prices eased on Tuesday as the U.S. dollar and Treasury yields rose, with investors awaiting minutes of the U.S. Federal Reserve's June meeting for insight into Chair Kevin Warsh's monetary policy direction.
Spot gold fell 0.9% to $4,127.59 per ounce by 0639 GMT, while U.S. gold futures for August delivery eased 0.7% to $4,139.50.
"With no clear market drivers, gold appears to be filling this week's opening gap higher during low-liquidity trade. It had a decent bounce last week, so it's not out of the ordinary to retrace against some of that move at the start of this week," said Matt Simpson, a senior analyst at StoneX.
The dollar gained, making greenback-priced bullion more expensive for holders of other currencies, while yields on the benchmark 10-year U.S. Treasury note advanced to a two-week high.
"Markets are obviously waiting for a little bit of direction from the Fed minutes to get a bit more sense around what the Fed's thinking is on the short-term interest rate policy," said Nicholas Frappell, global head of institutional markets at ABC Refinery.
Minutes of the Federal Open Market Committee's June 16-17 meeting will be released on Wednesday.
Gold prices are down more than 25% from record highs hit earlier this year, as the U.S.-Israeli war with Iran stoked inflation concerns, boosted the dollar and reinforced expectations of interest rate hikes.
Bullion hit a two-week high on Monday as a ceasefire deal eased some of those inflation concerns, while last week's weaker-than-expected U.S. jobs data prompted markets to dial back near-term interest rate-hike expectations.
Traders now see about a 56% chance of a rate increase in September, down from more than 60% before the data, according to the CME FedWatch tool. Higher interest rates make non-yielding bullion less attractive for investors.
Hong Kong launched a central clearing system for gold on Tuesday and also revived gold futures trading as it seeks to become a regional reserve hub for the precious metal.
Spot silver slipped 1.6% to $61.10 per ounce, platinum eased 0.9% to $1,617.20, and palladium lost 1.3% to $1,251.61. - Reuters
