Gold Tumbles Amid Holiday Impact and Strong Dollar

Gold prices dropped significantly, falling over 2% due to holiday market closures, easing geopolitical tensions, and a stronger U.S. dollar. Market analysts attribute the drop to decreased liquidity. Investors await the Federal Reserve's meeting minutes for insights on potential interest rate cuts.

Gold prices experienced a notable drop of more than 2% on Tuesday as market liquidity was affected by holidays in major regions. This downward trend was exacerbated by easing geopolitical tensions and a stronger dollar.

Spot gold settled at $4,898.53 per ounce by 0622 GMT, after dipping to $4,862 per ounce earlier. Trading remained thin, notably impacted by the Lunar New Year break across several Asian markets, including China and Korea, along with the U.S. holiday for Presidents' Day.

The U.S. dollar index's 0.2% rise against a basket of currencies made bullion more expensive for buyers using other currencies, intensifying the price pressure. Investors are closely watching the Federal Reserve's meeting minutes for hints on interest rate adjustments amid anticipated rate cut discussions.

(With inputs from agencies.)