Investing.com - Gold futures held steady in European trade on Tuesday, after falling to the lowest level in almost two weeks overnight, as investors continued to monitor movements in the U.S. dollar.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, extended its five-day win streak in early trade Tuesday, climbing to 94.26, the most since April 28. It last stood at 94.17.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Gold for June delivery on the Comex division of the New York Mercantile Exchange fell by as much as 0.5% to a daily low of 1,261.50 a troy ounce, a level not seen since April 28, before recovering slightly to $1,267.50 by 08:10GMT, or 04:10AM ET, up $1.00, or 0.08%.
On Monday, gold tumbled $27.40, or 2.12%, as gains in the dollar and global equity markets reduced the appeal of the precious metal.
Prices of the yellow metal are still up nearly 20% so far this year amid indications the Federal Reserve will take a slow and cautious approach to raising interest rates this year.
Gold is sensitive to moves in U.S. rates, as a rise would lift the opportunity cost of holding non-yielding assets such as bullion. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
Elsewhere on the Comex, silver futures for July delivery eased up 1.1 cents, or 0.06%, to trade at $17.10 a troy ounce during morning hours in London, while copper futures tacked on 0.6 cents, or 0.26%, to $2.112 a pound.
Investors digested another round of Chinese economic data. The National Bureau of Statistics reported earlier that China’s consumer price index rose 2.3% in April from a year earlier, below forecasts for an increase of 2.4%. The producer price index fell 3.4% on a year-over-year basis, compared to a decline of 4.3% in January, the agency said.
The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.