Gold prices hover around $1,300-level with dollar, Fed speakers in focus

Investing.com - Gold futures hovered around the key $1,300-level in North American trade on Tuesday, as investors monitored movements in the currency market while awaiting comments from a pair of Federal Reserve officials.

Gold for June delivery on the Comex division of the New York Mercantile Exchange rose to an intraday peak of $1,303.85 a troy ounce before falling back to $1,299.70 by 12:45GMT, or 8:45AM ET, up $3.90, or 0.3%.

On Monday, gold rallied to $1,306.00, the most since January 2015 as the U.S. dollar crashed to 15-month lows against a basket of other major currencies.

Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.

The dollar extended losses against a basket of six major currencies, slipping to a low of 91.89 at one point on Tuesday, its weakest level since January 2015. It last stood at 92.42, down 0.12% for the day.

In early trading, the yen rose to a fresh 18-month high of 105.55 against the dollar, while the euro hit its strongest level since last August at $1.1615.

The dollar index has fallen more than 6% so far this year as expectations faded that the Federal Reserve would move to normalize interest rates due to fears over a global economic slowdown.

Market players will pay close attention to a pair of speeches from Federal Reserve officials later in the day to further judge the balance of opinion among policymakers on the prospect of further rate hikes.

Cleveland Fed President Loretta Mester, who is an FOMC voting member, is due to be on a panel at an Atlanta Fed conference at 10:30AM ET, while Atlanta Fed President Dennis Lockhart, who is a non-voter, will give a speech on the economic outlook and monetary policy at 7:00PM ET.

Prices of the yellow metal are up nearly 22% so far this year amid indications the U.S. central bank is in no hurry to raise rates. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.

Elsewhere on the Comex, silver futures for May delivery shed 6.6 cents, or 0.37%, to trade at $17.59 a troy ounce during morning hours in New York.

Meanwhile, copper futures declined 2.6 cents, or 1.17%, to $2.240 a pound as fears over China's economic health intensified after factory activity shrank for a 14th straight month in April.

The China Caixin manufacturing purchasing managers index (PMI) for April fell to 49.4 from March's 49.7, missing forecasts for 49.9.

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