By Gina Lee
Investing.com – Gold was down on Tuesday morning in Asia, but remained near its highest level in more than four months, as investors digested comments by U.S. Federal Reserve officials that sought to assuage inflation concerns.
were down 0.23% to $1,880.15 by 12:08 AM ET (4:08 AM GMT).
The , which usually moves inversely to the safe-haven yellow metal, fell to a four-month low on Tuesday. U.S. Treasury long-dated yields also tumbled to two-week lows.
Fed Governor Lael Brainard, Atlanta Fed President Raphael Bostic and St. Louis Fed President James Bullard said a surge in prices, due to bottlenecks and supply shortages as the number of COVID-19 cases continue to fall, would not be surprising. However, they also reiterated that any price gains are likely to be temporary.
Bullard added he expects the inflation rate to be above 2% both in 2021 and 2022.
“Fed speak continues to support the idea that inflation in the U.S. will be transitory and that is good enough to keep short-term bullish momentum in place for gold… gold continues to face resistance from the $1,900 level, so if the dollar stabilizes over the next couple of sessions, bullion might remain steady,” Oanda Corp. senior market analyst Edward Moya told Bloomberg.
Elsewhere on the central bank front, the will hand down its policy decision later in the day, following by the a day later and the on Thursday.
Meanwhile, the U.S. will release its , the Fed’s preferred method of measuring inflation, on Thursday.
Investors’ bullish sentiment on gold is on the rise, with the yellow metal close to erasing its decline for 2021 to date.
However, they remain cautious about inflation and COVID-19 outbreaks in some countries. Gold’s 14-day relative strength index remained above 70 during the past week, a sign of a potential pullback to investors.
In other precious metals, palladium rose 0.5%, while silver fell 0.6% and platinum edged down 0.2%.
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