Gold prices fell on Tuesday, amid a slightly stronger dollar and optimism about a potential ceasefire between Russia and Ukraine dampened demand for safe-haven assets, Reuters reports, writes UNN.
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Spot gold fell 0.5% to $3,214.17 per ounce at 06:27 GMT (09:27 Kyiv time). U.S. gold futures fell 0.6% to $3,215.60.
The dollar recovered slightly after hitting a more than one-week low in the previous session, making dollar-denominated gold less attractive to holders of other currencies.
"We are seeing the instinctive reaction to the U.S. credit downgrade subside, and there is hope for a truce between Ukraine and Russia," said Kyle Rodda, a financial market analyst at Capital.com.
U.S. President Donald Trump said on Monday that Russia and Ukraine will immediately begin ceasefire talks.
"We are seeing buyers come out on dips below $3,200. However, I think we are in for a larger pullback, especially if there is further easing of geopolitical risks and we see growing pressure on yields due to U.S. fiscal policy," Rodda said.
Gold, considered a safe-haven asset in times of geopolitical and economic uncertainty, has hit several record highs this year on its way to a 22% gain this year.
Moody's downgraded the U.S. rating from "Aaa" to "Aa1" on Friday, citing debt and rising interest rates "which are significantly higher than those of similarly rated governments."
U.S. Federal Reserve officials have been cautious about the implications of the downgrade, as well as volatile market conditions, as they continue to "float" in a highly uncertain economic environment.
Several Fed officials are scheduled to speak later today, which could provide additional insight into the U.S. economy and central bank policy.
Markets are now pricing in at least 54 basis points of rate cuts this year, the first of which will occur in October.
Spot silver fell 0.4% to $32.23 an ounce, platinum rose 0.8% to $1,005.45, and palladium remained stable at $974.70.
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