Gold prices fell slightly on Tuesday, as the US dollar recovered slightly and hopes for a ceasefire between Russia and Ukraine eased investors' demand for safe-haven assets.
Spot gold prices fell 0.4%, down to $3,215.31/ounce at 2:10 GMT (ie 9:10 am Vietnam time). US gold futures also fell 0.5% to $3,218.4 an ounce.
The US dollar index (.DXY) recovered slightly after hitting a lower bottom than a week ago, making gold less attractive to holders of other currencies.
Capital.com's financial market analyst, Kyle Rodda, said: "We are seeing an immediate reaction to the decline in US credit rating, and at the same time, there is hope for a peace deal between Ukraine and Russia".
US President Donald Trump had a phone call with Russian President Vladimir Putin on Monday and said Russia and Ukraine would immediately begin talks towards a ceasefire.
Buyers began to show up as prices fell below $3,200 an ounce, Rodda added. However, I think gold could endure a bigger correction, especially as geopolitical risks ease and the pressure to increase yields from US fiscal policy increases.
Gold, considered a safe asset in the context of political and economic instability, has continuously set price records this year and increased by about 23% since the beginning of the year.
Meanwhile, officials of the US Federal Reserve (FED) on Monday cautiously assessed the impact of the US government's downgrading of the credit rating, in the context of the market continuing to face many economic uncertainties.
On May 16, Moody's downgraded US credit rating from Aaa to Aa1, citing public debt and interest rates as much higher than in countries with equivalent credit.
Many Fed officials are scheduled to speak today, possibly providing more information on the economic situation and monetary policy orientation.
The market is now forecasting at least 53 basis points (bps) for interest rate cuts this year, with the first cut possible starting in October.
Silver prices fell 0.3%, to 32.25 USD/ounce; platinum increased slightly by 0.3% to 1,000.71 USD/ounce; palladium decreased by 0.1%, to 973.74 USD/ounce.
