Investing.com - Gold prices edged lower during European morning hours on Tuesday, pulling back from its strongest level in a month as the dollar and global equities recovered from recent losses.
Comex gold futures dipped $4.20, or around 0.3%, to $1,251.50 a troy ounce by 3:05AM ET (07:05GMT). Meanwhile, spot gold was down $2.75 at $1,251.80.
The yellow metal settled higher for the second session in a row on Monday after hitting its strongest since February 27 at $1,261.00 after U.S. President Donald Trump's failure to push through a healthcare reform bill prompted investors to question the extent to which he can deliver on pro-growth policies that have been priced in since his election.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up around 0.1% at 99.12 in London morning trade. It fell to 98.67 on Monday, a level not seen since November 11.
The index had risen to a 14-year high near 104.00 early in January when expectations for significant stimulus under the Trump presidency were at their peak.
Market players awaited comments from a number of Federal Reserve policymakers later in the day for more clues on the timing of the next U.S. rate hike.
Tuesday sees Fed Chair Janet Yellen speak on workforce development challenges in low-income communities at 9:50AM ET (14:50GMT).
Kansas City Fed President Esther George, Dallas Fed President Rob Kaplan and Fed Governor Jerome Powell are also on tap Tuesday.
The Fed raised interest rates earlier this month, but stuck to its outlook for two more hikes this year, instead of three expected by the market.
Fed fund futures priced in around a 45% chance of a rate hike in June, according to Investing.com’s Fed Rate Monitor Tool. Odds of a September increase was seen at about 70%.
The precious metal is sensitive to moves in U.S. rates, which 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.
Also on the Comex, silver futures for May delivery shed 6.5 cents, or about 0.4%, to $18.04 a troy ounce. In the previous session, the metal touched its highest since March 2 at $18.15.
Meanwhile, platinum slumped 0.4% to $969.10, while palladium declined 0.7% to $789.10 an ounce.
Elsewhere in metals trading, copper futures dropped 1.1 cents, or 0.4%, to $2.621 a pound.