Gold prices were slightly higher on Tuesday after hitting four-week lows on Monday which deepened a bearish sentiment towards the metal.
On Tuesday December gold on the Comex rose 0.04% to $1,136.40 an ounce.
December Comex silver was down 0.21% to $15.375 an ounce, while December Comex copper was unchanged at $2.313 a pound.
The yellow metal erased losses Tuesday as a day earlier U.S. PMI numbers came in lower than expected, undermining sentiment for the dollar. The gains were capped, however, as investors still highlighted a higher probability of the first U.S. rate lift-off in December.
When asked about an outlook on gold, Tariq Ali, investment strategist at Standard Chartered, said to CNBC:
"We expect gold prices in USD to gradually head lower into 2016"
as the U.S. starts to normalize its policy. Appetite for gold "is
likely to wane further as the Fed hikes rates" because "higher real
(adjusted for inflation) yields elsewhere will likely reduce the
incentive to hold non-interest paying gold," wrote Ali.
David Lennox, a resource analyst at Fat Prophets commented that a strong dollar would have bigger impact on gold production than consumption. Lennox explained that there was an upside from a strong dollar for producers because they can sell gold in dollar terms and see higher returns when they convert their revenues back to domestic currencies.
