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Gold futures tumbled early Wednesday, falling below the important psychological bar at $ 1,200 an ounce, a day after the bulls posted their first gain over the past three sessions.
December gold
GCZ8, -0.25%
abandoned $ 3.20. or 0.3%, to 1199 dollars an ounce, while worries about US-China trade relations weighed on the valuable product.
The yellow metal has been shaken by concerns over rising interest rates and fears that clashes between the major superpower powers will lead to a decline in demand for the metal. To date, tariff disputes between Washington and Beijing have supported gains in US dollars, putting pressure on commodities that are generally sold in the money.
"The depreciation of gold was based on a much stronger dollar and the outlook for higher US interest rates," FXTM analyst Lukman Otunuga said Wednesday.
He speculated that gold could face a new lower leg if it breaches "the level of $ 1,191 to open the doors at $ 1,180".
Other metals that tend to be sensitive to trade in copper and silver have been moderately active.
December money
SIZ8, + 0.01%
has changed little, but has dropped slightly, to 14,140 dollars an ounce, while December
HGZ8, + 0.69%
added a penny, or 0.5%, to reach $ 2,632 per pound.
In the longer term, commodity buyers expect monthly data on producer prices to measure inflation. An August report on producer prices is expected to arrive at 8:30 am ET with economists surveyed by MarketWatch, which forecasts 0.2% growth. Gold is traditionally considered a hedge against inflation.
Signs of inflation may prompt the Federal Reserve to accelerate its cycle of interest rate tightening, which could strengthen the situation. The Federal Government's Open Tenders Committee is expected to end a two-day meeting on Sept. 26, hoping the FOMC will lift its rates by a quarter of a percentage point.
Elsewhere on Comex, october platinum
PLV8, -0.24%
fell 0.5% to $ 785 an ounce, while December's palladium
Paz8, + 0.14%
fell by less than 0.1% to $ 961.20 an ounce.
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