Gold fell from the previous day’s three-week peak on Wednesday as the dollar bounced back following the release of upbeat Chinese trade data, which in turn, boosted risk appetite.
New York-traded gold futures for June delivery gave up 1.09% to trade lower at $1,246.80 an ounce by 0946 GMT.
The precious metal peaked yesterday at $1,262.60 an ounce, its highest since March 18.
The U.S. dollar index, which tracks the American currency’s standing against several major currencies, went up 0.54% to 94.52, rebounding from the previous day’s eight-month trough of 93.62.
The dollar had stumbled after it became apparent that the Federal Reserve would not be raising interest rates anytime soon.
A hike in rates would have boosted the dollar as higher interest rates make the dollar very attractive to yield-seeking investors. Gold, meanwhile, becomes more expensive for holders of other currencies, making it less appealing to investors.
An upbeat Chinese trade data allayed concerns over a slowdown in the world’s second-largest economy. Fresh data revealed that Chinese exports grew 11.5% in March from the same period last year, representing the first rise since June 2015.
Gold has been on the rise since the start of the year, gaining 17% so far, as fears over a slowing global economy and concerns over Europe’s banking sector caused investors to turn to gold, the yen and other safe haven assets for relief.
Still in metals trading, silver futures in New York for May delivery gave up 0.97% to $16.06 an ounce, while copper for May delivery tacked on 0.42% to trade at $2.156 a pound.