Gold futures settled lower on Tuesday, as the dollar firmed up against other currencies amid likelihood of an increase in interest rates sometime in the foreseeable future.
U.S. Treasury Secretary Janet Yellen said in an interview that the Federal Reserve may have to hike interest rates to keep the economy from overheating.
The dollar’s strength was also due to comments from Fed Chairman Jerome Powell, who said U.S. economic outlook has clearly brightened amid faster vaccination rates and fiscal stimulus. However, he cautioned that the economy is “not out of the woods yet.”
“While the recovery is gathering strength, it has been slower for those in lower-paid jobs,” Powell said at a National Community Reinvestment Coalition event on Monday.
The dollar index rose to 91.40 by noon, and despite subsequently paring some gains, was up 0.32% at 91.25 a little while ago.
Gold futures for June ended down $15.80 or about 0.9% at $1,776.00 an ounce, after having surged up 1.4% on Monday.
Silver futures for July closed lower by about $0.402 or 1.5% at $26.558 an ounce after rising more than 4% in the previous session. Copper futures for July settled at $4.5215, down $0.0070 or 0.2% from the previous close.
New orders for U.S. manufactured goods showed a notable rebound in the month of March, according to a report released by the Commerce Department on Tuesday.
The Commerce Department said factory orders jumped by 1.1% in March after falling by a revised 0.5% in February. Economists had expected factory orders to surge up by 1.3% compared to the 0.8% drop originally reported for the previous month.
Meanwhile, a separate report released by the Commerce Department showed the U.S. trade deficit widened to a new record high in March, coming in at $74.4 billion, up from a revised $70.5 billion in February.
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