Marginal gains for gold, held above $1,700

Gold closed with small gains on Tuesday, holding above $1,700 an ounce as the dollar continued to weaken against major currencies.

Specifically, gold for August delivery added 50 cents, or less than 0.1%, to settle at $1,710.70 an ounce. Meanwhile, silver for September delivery lost 13 cents, or 0.7%, to settle at $18.713 an ounce.

Meanwhile, copper for September delivery fell 5 cents, or 1.6%, to $3.291 a pound. Platinum for October delivery added $2.90, or 0.3%, to $858.90 an ounce and palladium for September delivery gained $5.10, or 0.3%, to $1,854.20 an ounce.

“The big drop in the dollar this week has limited selling interest in precious metals,” Jim Wyckoff, senior analyst at Kitco.com, said Tuesday.

Notably, the ICE US Dollar Index, which tracks the dollar’s strength against a basket of major currencies, fell 0.7% today.

The recent move toward dollar-euro parity has been a “short-term headwind for gold,” Michael Cuggino, president and portfolio manager of the Permanent Portfolio Family of Funds, told MarketWatch. “This is primarily driven by a desire to hold US assets in aggregate, given today’s global macroeconomic uncertainties.”

The euro, which last week hit a 20-year low by falling below parity against the dollar, rose 0.9 percent to $1.0238 in Tuesday trading.

Meanwhile, the comments and actions of the Federal Reserve Bank (Fed) to combat inflation have been “more aggressive than their European counterparts, who, fearing a wider and deeper recession than the one that may occur in the US , have been reluctant to raise rates at the same rate,” Cuggino said.

“We believe this is a short-term situation and gold will trend higher as the dollar likely weakens with the European Central Bank (and others) starting to raise interest rates following the Fed,” he said. It is noted that the ECB will hold its next policy meeting on Thursday.