23.8 C
New York
Thursday, October 6, 2022

Gold recoups some losses on dollar weakness

LONDON: Gold recovered some of its recent losses on Monday, helped by a pullback in the dollar and easing fears about an oversized rate hike by the US Federal Reserve.

Spot gold was up 0.3% at $1,712.49 per ounce by 1242 GMT, after rising 1% earlier in the session. US gold futures rose 0.4% to $1,711.00. Last week bullion hit its lowest in nearly a year.

The dollar index was off its near 20-year high, down 0.5%, making greenback-priced gold less expensive for buyers holding other currencies.

“Markets are paring back the odds of a 100-basis point Fed rate hike at its July policy meeting, which is translating into some measure of relief for bullion,” said Han Tan, chief market analyst at Exinity.

US consumers tempered their inflation expectations in July alongside a sharp drop in gasoline prices over the past month, a development likely to be welcomed by Federal Reserve officials worried that expectations for high inflation could become embedded and complicate their task of reining in price increases.

Fed’s aggressive inflation-fighting policy has dented bullion’s safe-haven appeal, as rising interest rates make the non-interest bearing asset seem less attractive.

“However, with a 75-basis point move now looking more likely, the US dollar has weakened slightly from the record it hit last week, providing relief across equity and commodity markets,” said Rupert Rowling, market analyst at Kinesis Money.

Fed officials signalled on Friday that they would stick to a 75-bp rate increase at their July 26-27 meeting.

Focus also remains on the European Central Bank’s meeting later this week where it is expected to raise rates by 25 bps.

Meanwhile, China Construction Bank Corp said it would suspend some types of trading in gold and silver for clients, starting 7 a.m. on Aug. 15.

Spot silver rose 0.7% to $18.83 per ounce, platinum jumped 0.9% to $857.75, while palladium gained 2.3% to $1,870.26.

Gold recoups some losses on dollar weakness

Source: Brecorder

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected

- Advertisement -

Latest Articles

Popular Articles