Gold prices edged lower on Wednesday as the U.S. dollar rebounded, making the precious metal more expensive for holders of other currencies. Spot gold was down 0.2% at $1,286.50 per ounce.

Dollar Strength Weighs on Gold

The dollar index, which measures the greenback against a basket of six major currencies, rose 0.3%, putting pressure on gold prices. A stronger dollar typically leads to lower gold prices, as it increases the cost for international buyers.

Economic Data in Focus

Investors are closely monitoring upcoming economic data releases, including U.S. jobs data, for further indications on the strength of the economy and potential future interest rate hikes by the Federal Reserve. Higher interest rates tend to diminish the appeal of non-yielding assets like gold.

Key Factors Influencing Gold Prices:

• Dollar Strength: A stronger dollar typically weakens gold prices.
• Interest Rates: Rising interest rates can reduce the attractiveness of gold.
• Economic Data: Economic indicators influence investor sentiment and gold prices.

Analysts suggest that gold prices may remain range-bound in the near term, influenced by the competing forces of dollar movements and economic data.