Investing.com - Gold prices retreated from the previous session's seven-week high on Tuesday, as traders continued to monitor the direction of the dollar to gauge the appeal of the precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery shed $4.80, or 0.39%, to trade at $1,213.80 a troy ounce during European morning hours. Prices held in a tight range between $1,211.10 and $1,215.90 an ounce.
A day earlier, gold rallied to $1,224.50, the most since February 17, before settling at $1,218.60, up $17.70, or 1.47%.
Futures were likely to find support at $1,178.20, the low from March 31, and resistance at $1,236.70, the high from February 17.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.15% to trade at 97.35 early on Tuesday.
Gold often moves inversely to the U.S. dollar, as prices become more expensive for buyers using other currencies.
The dollar pushed higher against the euro and the yen on Tuesday, having regained almost all the ground lost in the wake of Friday’s unexpectedly weak U.S. jobs report.
The Labor Department reported Friday that the U.S. economy added 126,000 new jobs in March, the smallest increase since December 2013.
The disappointing data makes it more likely that the Federal Reserve will wait until the end of the year to raise interest rates from record low levels. Market players had previously speculated that U.S. interest rates could start to rise as early as June.
Gold prices are up nearly 6% since hitting a recent low of $1,140.60 on March 17, as indications that the U.S. economy slowed in the first quarter fuelled bets the Fed will hold off on hiking interest rates until late 2015.
A delay in raising interest rates would be seen as bullish for gold, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.
Elsewhere on the Comex, silver futures for May delivery dropped 23.7 cents, or 1.39%, to trade at $16.87 a troy ounce, while copper for May delivery tacked on 2.4 cents, or 0.88%, to trade at $2.741 a pound.