Investing.com - Gold prices edged lower on Tuesday as strength in the dollar continued to act as a headwind for the precious metal.
Gold futures for June delivery on the Comex division of the New York Mercantile Exchange dipped $1.90 or 0.14% to $1,312.20 a troy ounce by 04:31 AM ET (08:31 AM GMT).
Last week prices fell to their lowest levels in two months and posted a third consecutive weekly decline.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.3% to 92.89, its highest level of the year.
A stronger dollar tends to hurt demand for gold and other dollar-denominated commodities, making them more expensive for overseas buyers.
Rising U.S. Treasury yields and broadly solid economic data have boosted the dollar in recent weeks, underlining expectations for a steady pace of interest rate increases by the Federal Reserve this year.
The central bank has projected two more increases for the year, but some investors expect three more.
Last week’s Fed statement acknowledged a recent pick-up in inflation, leaving it on track to deliver its second rate increase of the year when it meets in June.
Expectations for a faster pace of rate hikes tend to be bearish for gold, which struggles to compete with yield bearing assets when interest rates rise.
Investors were keeping an eye on geopolitical developments, ahead of an announcement by U.S. President Donald Trump later in the day about the future of an international nuclear agreement with Iran, which he has repeatedly threatened to withdraw from.
In other precious metal trade, silver futures edged down to $16.48, while platinum futures were down 0.35% to $910.10.
Among base metals, copper futures shed 1.17% to trade at $3.044 a pound.