Gold prices steady after hitting 2-week high on dollar retreat

GOLD steadied on Tuesday (May 24) as the US dollar stabilised after a slide in the previous session that drove greenback-priced bullion to its highest level in 2 weeks.

Spot gold held its ground at US$1,852.84 per ounce, as of 12.48 am GMT, after scaling to its highest since May 9 at US$1,865.29 on Monday. US gold futures gained 0.3 per cent to US$1,852.40.

The dollar steadied after dropping to a 1-month low in the previous session. A weaker dollar makes bullion more attractive for overseas buyers.

Benchmark US 10-year Treasury yields eased, buoying demand for zero-yield gold.

Kansas City Federal Reserve Bank president Esther George said on Monday she expects the US central bank to lift its target interest rate to about 2 per cent by August, with further action dependant on how both supply and demand are affecting inflation.

Bullion, seen as a safe store of value during times of economic crises, tends to become less attractive to investors when US interest rates are raised because it yields nothing.

Asian shares got off to a sluggish start on Tuesday after a rally on Wall Street was soured by an early slide in US stock futures, while the euro was near 1-month highs as odds narrowed on a July rate rise by the ECB.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.44 per cent to 1,068.07 tonnes on Monday from 1,063.43 tonnes on Friday.

Spot silver dipped 0.2 per cent at US$21.72 per ounce, and platinum eased 0.3 per cent to US$956.10, while palladium edged up 0.2 per cent to US$1,996.20.

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