By Geoffrey Smith
Investing.com -- Gold prices fell on Tuesday as risk assets extended their recovery amid hopes that the lifting of lockdown restrictions in the U.S. and Europe will allow a sharp rebound in advanced economies later in the year.
By 11:10 AM ET (1510 GMT), gold futures for delivery on the Comex exchange were down 0.5% at $1,714.40 a troy ounce, having earlier dipped as low as $1,704.40.
Silver futures were 0.9% lower at $15.07, having briefly pushed below $15 an ounce for the first time this week. Platinum futures rose 0.8% to $783.25, while copper futures were unchanged at $2.39 a pound.
While the longer-term bull trend still appears to be intact, there has been no serious test of the high of $1,788.80 in the two weeks since that high was set. Prices have essentially drifted since then, with speculative net long positions in gold declining steadily.
Losses were held in check by some more grim economic data - the Conference Board's consumer sentiment index fell to its lowest level since 2014 - and by a weaker dollar. The dollar index, which tracks the greenback against a basket of developed currencies, fell 0.2% to 99.85. Prices were also supported by the knowledge that much of the monetary stimulus that has been put in place since February by central banks will take much longer to reverse.
The Federal Reserve will later begin a two-day meeting from which further stimulus measures may emerge, while the European Central Bank is widely expected to increase the scope of its bond-buying at its council meeting on Thursday.
Analysts at ING expect the ECB to raise its Pandemic Emergency Purchase Program by 500 billion euros ($540 billion) to $1.25 billion, in order to pre-empt any fresh widening of eurozone sovereign yield spreads. Italy’s 10-year yield spread to Germany tightened to the narrowest in over two weeks on Tuesday at 217 basis points.