Investing.com – Gold prices dropped to year-to-date lows as the flight-to-quality eased somewhat, and the dollar renewed its climb higher, dampening demand for the precious metal.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange fell by $9.50 or 0.75%, to $1,259.40 a troy ounce to remain just above a year-to-date low of $1,256.40 seen earlier in the session.
Gold's plunge to a six-month low was met with brief support but that soon faded as the dollar caught a bid amid weakness in safe-haven currencies.
The rise in the greenback emerged despite weaker U.S. economic data showing consumer confidence missed forecasts.
The Conference Board’s consumer confidence gauge fell to 126.4 in June, while May's reading was revised higher to a reading of 128.8. Economists had expected a reading of 127.6.
Yet, expectations for a faster pace of U.S. rate hikes continued to lend support to the greenback, prompting traders to view to any upside in gold as a selling opportunity.
CFTC COT data showed money managers slashed their net long positions in gold futures, and piled into new short positions in the week ended June 22.
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 0.42% to $16.26 a troy ounce, while platinum futures gained 0.17% to $872.50 an ounce.
Copper prices gained 0.15% to $3.014.