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China's net gold imports via Hong Kong fall in March
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U.S. Consumer Confidence April data due at 1400 GMT
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U.S. dollar up 0.3%
(Updates prices)
By Ashitha Shivaprasad
April 25 (Reuters) - Gold prices dipped on Tuesday as
the dollar firmed, while investors shied away from making big
bets ahead of U.S. economic data that could determine the
Federal Reserve's rate-hike strategy.
Spot gold fell 0.5% at $1,978.72 per ounce by 1141
GMT, while U.S. gold futures also slipped 0.5% at
$1,989.00.
The dollar index rose 0.3%, making bullion more
expensive for overseas buyers. Market focus is on the U.S. consumer confidence report
scheduled at 1400 GMT, while core personal consumption
expenditures index and GDP quarterly growth rate are due later
this week.
"If consumer confidence is positive then the market is
seeing a lesser chance of the U.S. economy entering a recession,
which is negative for gold," said Peter Fertig, an analyst with
Quantitative Commodity Research.
"Restrictive monetary policy from the Fed might limit upside potential for gold in the near-term."
Investors are expecting a 90% chance of a 25-basis point hike by the U.S. central bank at its May 2-3 policy meeting. "We believe prices at $2,000 per ounce or above are only justified in case of a broad-based and longer-lasting U.S. recession, accompanied by a return of safe-haven seekers," Carsten Menke, head of Next Generation Research at Julius Baer, wrote in a note.
Gold is a safe investment amid economic uncertainties while rising interest rates increase the opportunity cost of holding zero-yielding gold, denting its appeal. According to Reuters technical analyst Wang Tao, spot gold may end its bounce below a resistance at $2,009 per ounce, and resume its downtrend thereafter.
On the physical front, top consumer China's net gold imports via Hong Kong in March fell more than 25% from the previous month, Hong Kong Census and Statistics Department data showed.
Among other precious metals, silver fell 2.3% to
$24.6 per ounce, platinum was down 1.3% at $1,067.58 and
palladium lost 2.9% to $1,490.79.
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by
Krishna Chandra Eluri and Janane Venkatraman)
