Investing.com - Gold prices edged lower on Tuesday, despite a slump in the dollar, as investors continued to favour riskier assets for the second straight day.
Gold dropped to its lowest level in two-weeks, as risk on sentiment continued to dominate asset flows, after recent polls pointed to an easy victory for pro-EU candidate Emmanuel Macron in the runoff vote for the French presidency, scheduled for May 7.
Gold for June delivery on the Comex division of the New York Mercantile Exchange dipped $11.66, or 0.91%, to $1,265.85 a troy ounce by 13:50 EDT.
Gold failed to capitalize on a broad based dollar selloff, as the dollar index fell for a second straight day pressured by a strong rally in the euro.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.29% to 98.62 by 13:46 EDT.
Meanwhile the release of mixed U.S. economic data failed to stem the slump in gold prices, as new U.S. home sales rose to an eighth-month high in March while consumer confidence fell in April.
New U.S. home sales surged to an eight month high in March, which added to the narrative of a strengthening U.S. economy.
The Consumer Confidence Index dropped to 120.3 in April, compared to expectations of a fall to 122.5 for the month.
The decline in gold prices came amid a rally in U.S. treasury yields as investors’ expectations grew that the Federal Reserve was poised to increase its benchmark rate in June.
The yield on the benchmark U.S. 10-Year traded higher at 2.314, up 1.74%.
According to investing.com’s Fed rate monitor tool, nearly 63% of traders expect the Fed to hike interest rates in June, compared to 33.7% the previous week.
Gold is sensitive to moves in U.S. interest rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
Elsewhere, platinum fell 0.30% to $957.30 while silver futures dipped 1.61% to $17.64 a troy ounce.
Natural Gas lost 0.60% to $3.141 while copper rose 1.05% to $2.592.