Investing.com – Gold prices struggled to advance amid subdued demand as the dollar clawed back some of its losses, while an uptick in U.S. bond yields also limited upside momentum.
Gold futures for June delivery on the Comex division of the New York Mercantile Exchange fell by $4.00 or 0.30%, to $1,316.60 a troy ounce.
The precious struggled to hold onto gains from earlier in the session as the dollar moved off its lows of 92.11, prompting traders to opt for caution on initiating large bullish bets on the yellow metal.
The move off the lows in the dollar emerged despite some analysts questioning whether there was further upside momentum for the greenback after it had hit a high of 93.26 last week.
The divergence between US growth and interest rates compared to the rest of the world – one of catalysts of the recent dollar rally – was nearing its peak, ING warned last week.
The weakness in gold comes amid subdued safe-haven demand despite an uptick in geopolitical uncertainty as Iran-Israel tensions in Syria remained elevated, while the U.S. and China are slated for a second round of trade talks latest this week.
CFTC COT data showed money managers slightly increased their net long positions in gold futures to 107,400 lots from 106,800 lots for the week ended May 8.
The yellow metal was also held back by an earlier surge in the 10-year treasury yields to nearly 3%.
Gold is sensitive to moves higher in both bond yields and the U.S. dollar – A stronger dollar makes gold more expensive for holders of foreign currency while a rise in U.S. rates, lift the opportunity cost of holding gold as it pays no interest.
In other precious metal trade, silver futures fell 0.79% to $16.62 a troy ounce, while platinum futures fell 1.21% to $914.70 an ounce.
Copper fell 0.63% to $3.09.