Investing.com - SPDR Gold Shares (NYSE:GLD) bounced off session lows but ultimately traded lower on Tuesday, pressured by a spike in the dollar, after two Federal Reserve policymakers hinted at a possible rate hike in March.
Gold for April delivery on the Comex division of the New York Mercantile Exchange lost $0.45 or about 0.04%, to trade at $1,238.85 a troy ounce by 13:05 ET, after falling to a session low of $1,226.50
Gold started the session on the back foot, after the dollar surged to session highs, following bullish comments from two Federal Reserve policymakers.
Philadelphia Fed President Patrick Harker said Monday that he would likely support an interest rate increase at the central bank’s next meeting in March should the economy continue to strengthen.
Harker’s comments, came fresh off the heels of Cleveland Fed President Loretta Mester's statement, the Cleveland Fed member said she would be “comfortable” raising interest rates at this point as inflation pressures pick up.
The yellow-metal recovered from an early session slump, as the dollar was pegged back, following a report from Markit, a market research group, which revealed U.S. Services Purchasing Managers’ Index (PMI) eased to 53.9 in February, falling short of analysts’ expectation of an increase to 55.8.
Market participants’ turn their attention to the minutes from the Fed’s January meeting, due to be released on Wednesday, for clues on the likelihood of a March interest rate hike.
Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
Elsewhere, Silver Futures traded higher at $18.04, up 0.013% while Copper Futures gained 1% to trade at $2.75.
Meanwhile, Natural Gas Futures prices tumbled more than 8% and traded at $2.599, the lowest price since November 2014.