dollar, the stock market in focus

Gold prices fell on Tuesday as the dollar stands near the highs reached for several weeks due to the expected reduction in an aggressive reduction in the US rate, although weaker stock markets have limited metal losses.

Spot gold was down 0.1% to $ 1,393.95 an ounce from 0:40 GMT.

Gold futures in the US fell 0.2% to $ 1,396.50 an ounce.

"The weakness in gold prices is largely due to softer expectations of rate cuts and the recovery in bond yields." Markets continue to fall 25 basis points, but it seems confidence has abated and the dollar has recovered, "said Benjamin Lu, badyst. at Phillip Futures.

The dollar index was close to a three-week high and the US Treasury yield curve reached its flatter level in more than a month after investors had canceled their expectations for a sharp cut in the US rate at the end of July.

A week ago, the market forecasted a 80.1% chance of a 25 basis points reduction and a 19.9% ​​chance of a 50 basis point reduction, according to L & B. FedWatch tool from the CME group. Chances are now 98% and 2%, respectively.

In addition, US consumers raised their inflation expectations for the first time in three months, adding that the New York Fed had announced Monday a decline in its forecasts.

The decline in gold prices, however, was limited by the weakening of the financial markets, as Asian equities reached their lowest level in two and a half weeks on Tuesday.

"We observe a lot of uncertainty about the Fed's policies in risky badets in general.The fall of stock markets is the most poignant example of gold prices," said Stephen Innes , Managing Partner of Vanguard Markets.

Market participants are now waiting for Fed President Jerome Powell's two-day testimony in front of Congress, which begins Wednesday to gather clues on a rate cut.

At the same time, holdings of the SPDR Gold Trust, the largest gold-backed exchange-traded fund in the world, fell 0.15 percent to 795.80 tons on Monday, from 796.97 tons on Friday.

Hedge funds and fund managers reinforced their upside stance on COMEX gold in the week of July 2, the CFTC announced in a report postponed due to Independence Day holiday Monday. the United States.

On the technical front, spot gold could end its correction around a $ 1,387 support and then retest a resistance at $ 1,421 an ounce, according to badyst Reuters Wang Tao technique.

Among the other precious metals, silver rose 0.1% to $ 15.04 an ounce.

Palladium slipped 0.6% to $ 1,551.87 and platinum declined 0.3% to $ 811.17.