NEW YORK (TheStreet) -- Gold prices closed little changed on Tuesday as investors took a breather following more than a week of tumbling prices triggered by some de-escalation in Crimea and a more hawkish Federal Reserve.
Gold for April delivery at the COMEX division of the New York Mercantile Exchange was effectively unchanged at $1,311.40 an ounce. The gold price traded as high as $1,318 and as low as $1,306 an ounce, while the spot price was adding $2.90, or 0.22%.
"Gold has gone away from being a buy-and-hold long term inflation hedge to being a trader's vehicle," Oliver Pursche, co-portfolio manager at GMG Defensive Beta Fund, said in an interview.
Gold has pulled back more than 4.5% since March 14, when the yellow metal closed at a year-to-date high.
A fundamental reason gold dipped since then was due to a strengthening U.S. dollar, which last week benefitted from Fed Chairwoman Janet Yellen's comment that the central bank would begin to raise interest rates about six months after it concludes its economic stimulus program. Such a move boosts the value of the dollar as a requisite to winding down easy money policies.
Before mid-March, gold witnessed a 14.5% rise that benefitted from the unexpected crisis in Ukraine. Investors bid up the price of the precious metal when Russia entered the situation on hopes that Crimea would split and join the country. Traders rewarded the yellow metal with upward momentum based on a hedge against crisis.
While the Crimea crisis wasn't the sole driver of gold prices, it did serve as an example of why investors should consider allotting some of their portfolio to the yellow metal as a hedge against surprise crises, said Juan Carlos Artigas, the World Gold Council's director of U.S. research.