Gold Drops Off Six-Year Highs

Gold prices eased off six-year highs early on Wednesday after the U.S. dollar gained strength.

Gold for August delivery was last seen down US$6.10 to US$1,412.60 per ounce in Comex electronic trade.

The drop is the first in five sessions that saw the precious metal rise to the highest since 2013 as expectations of lower interest rates and rising tensions between the U.S. and Iran sent investors to the metal’s safe haven.

“The economic backdrop supporting higher gold prices has improved,” RBC Capital Markets said in a note. “Evidence of a slowing global economy has resulted in Developed World central banks taking a more dovish stance toward their monetary policy. However history has shown that higher gold prices associated with geopolitical shocks/military conflicts tend to be temporary

The ICE dollar index was last seen up 0.1 points to 96.24. A higher dollar makes gold more expensive for international buyers, cutting demand.

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