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Thursday, October 6, 2022

Gold attempts rebound as dollar stalls ascent

LONDON: Gold rose on Thursday as a pause in the dollar’s rally encouraged some investors to snap up bargains after two sessions of heavy losses that sent prices to a nine-month low.

Spot gold was up 0.5% at $1,747.7 per ounce by 10:14 a.m. ET (1414 GMT). US gold futures rose 0.6% to $1,747.20.

“We’re seeing some good old-fashioned bargain hunting after gold’s dramatic sell-off. There is clearly some interest in buying on dips after yesterday’s move into the low $1,700s,” said David Meger, director of metals trading at High Ridge Futures.

“The dollar not increasing further today has also allowed gold to bounce back.” The greenback has emerged as the preferred safe haven amid growing recession risks and had hit a near two-decade high in the previous session before easing on Thursday.

“Any strength we might see in gold in the short term must be treated with extra care as the selling could easily resume amid an environment of strong US dollar and rising interest rates,” said Fawad Razaqzada, market analyst at City Index.

On Wednesday, minutes of the Federal Reserve’s June meeting showed that a deteriorating inflation situation and concern about lost faith in the central bank’s power to rein it prompted the largest hike in US interest rates in nearly three decades.

Gold has shed more than $300 since the Fed began raising interest rates in March to tame unruly inflation, increasing the opportunity cost of holding non-yielding bullion.

The next catalyst for the market could come on Friday when the labour market report was slated for release. Data showed earlier in the day that weekly jobless claims rose last week and demand for labour slowed, while layoffs surged to a 16-month high in June.

Spot silver rose 1.2% to $19.40 per ounce, platinum jumped 2.1% to $874.20 and palladium climbed 5.1% to $2,002.42.

Gold attempts rebound as dollar stalls ascent

Source: Brecorder

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