Gold hovers near six-week low as dollar strengthens

Gold prices fell in European trade for a second session, almost hitting six-week lows as dollar powered up against major rivals. 

Dollar is boosted by strong demand following bullish remarks by Fed officials, which bolstered the case for a Fed rate hike in June. 

Gold Prices Today

Gold prices fell 0.2% to $1,954 an ounce, with a session-high at $1,962 an ounce, after losing 0.9% yesterday, resuming losses after a short rebound from six-week lows at $1,952. 

Dollar

The dollar index rose 0.3% on Thursday on track for the third straight session, hitting two-month highs at 104.16 against a basket of major rivals. 

Dollar's gains come on the back of strong alternative investment demand, making dollar-denominated gold futures less appealing to holders of other currencies. 

Fed Remarks

Fed member Christopher Waller said the decision on whether the Fed will raise interest rates in June will depend on upcoming data, adding he doesn't support a pause to policy tightening until there's clear proof that inflation is heading to 2%. 

Fed Minutes

The Federal Reserve's May minutes showed the policymakers are leaning towards a pause in interest rate hikes in June amid uncertainty about US economic outlook. 

US Rates

The markets are currently pricing in a 31% chance of a 0.25% Fed rate hike in June, with a 69% chance of no change. 

Economic Data

Now investors await important data later today on US GDP for the first quarter of the year, and unemployment claims. 

Obviously strong data will boost the case for a Fed rate hike in June and underpin the greenback, in turn hurting gold prices. 

The SPDR

Gold holdings at the SPDR Gold Trust remained flat yesterday at 941.29 tones.