Gold drops from two-week high on firmer equities, dollar

The precious metal surrendered its earlier gains when it leaped to a two week high during the Asian session after China’s rate cut decision on the weekend gave some support to gold prices.

Gold halted found an end to the longest rally in five weeks on Monday, as a 15-year high in U.S. technology stocks enhanced investors’ risk appetite.

Still, investors prefer to locate their money in equities at the expense of the safe-haven metal on signs of progress in the U.S. economy.

NASDAQ set a new fresh record high of 5,008 points, Dow Jones climbed to 18,288 points and S&P index reached 2,117 points.

China’s central bank decision encouraged purchase in gold as foreign currencies continue to offer low or zero interest rate.

However, further pressure may stem on gold prices, as the Fed will probably hike interest rates anytime this year.

Another key downside on gold prices came from the dollar’s rally against major currencies, where the six-currency gauge, the dollar index, touched an 11-year peak.

The yellow metal fell from a high of $1223.11 an ounce to trade around $1206.60, while the lowest point was touched at $1204.50.