Spot gold slid 0.5% to $1,793.59 per ounce by 0348 GMT, while U.S. gold futures dipped 0.7% to $1,795.90.

The dollar index inched 0.1% higher, denting gold’s appeal for those holding other currencies, while Asian shares held onto their recent gains.

 “The higher equity markets, the risk-on narrative... really diminishing the need for gold as a hedge,” said Stephen Innes, managing partner at SPI Asset Management.

The coronavirus curve in some hotspots is easing and the U.S. Food and Drug Administration’s approval of vaccinations should also bring down the curve, Innes said.

The U.S. drug regulator granted full approval on Monday to the Pfizer Inc/BioNTech SE COVID-19 vaccine, raising hopes inoculations could accelerate.

Risk sentiment was also underpinned by remarks from top U.S. infectious disease expert Dr. Anthony Fauci that the nation could get COVID-19 under control by early next year if vaccinations ramp up.

Investors now await Powell’s speech at the Fed’s annual economic symposium at Jackson Hole, Wyoming, on Aug. 27 to see if he gives a timeline on the stimulus withdrawal.

The Fed is likely to “talk about the concept of tapering, but they won’t give a timeline,” IG Market analyst Kyle Rodda said.

“Everyone is willing to take a punt that they’re going to maybe take a softer stance to tapering this weekend and it’s a good thing for gold.”

Gold is considered a hedge against inflation and currency debasement likely to result from widespread stimulus measures.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.2% to 1,004.63 tonnes on Tuesday from 1,006.66 tonnes on Monday.

Silver fell 0.7% to $23.66 per ounce, while platinum dropped 1.2% to $999.61. Palladium was down 1.7% at $2,431.81.

Source: Reuters