Gold Pulls Back in Asia as Weakness Remains

By Doris Yu

Investing.com – Gold was down Wednesday morning in Asia, continuing along a downward trend and moving inversely to rising interest rates.

for August delivery were down 0.15% to $1,708.25 by 10:10 PM ET (2:10 AM GMT). The , which tracks the dollar against a basket of currencies, was little changed, down just 0.04% to 106.64.

The dollar weakened as expectations grew that the U.S. Federal Reserve might back off from raising rates by a full percentage point when it meets next week and, instead, stick with a raise of 75 basis points.

In turn, the European Central Bank may now be considering a 50-basis-point hike to its rates on Thursday, double what had been priced in, according to a Reuters report. That expected hike helped push the up on its largest one-day gain in a month.

In other precious metals, fell 0.11% to $18.685; rose 0.38% to 865.05; rose 0.52% to $3.3105; and rose 0.44% to $1,879.03.

Also helping keep gold down was a rally in shares in the U.S. on Tuesday after strong earnings reports helped Wall Street higher.

Reports that a deal could be near between Russia and Ukraine to end a blockade on grain exports and that the Nord Stream 1 gas pipeline out of Russia could restart this week as scheduled helped give markets a boost.

“There’s still a lot of uncertainty around whether they’ll actually materialize, [but] a little bit of good news goes a long way in this market,” Tai Hui, chief global market strategist for APAC at JPMorgan Asset Management, told CNBC.