Gold recovers from one-month low as dollar rally stalls


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Gold prices reversed course to trade

higher on Monday as a dollar rally lost steam, having pushed

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bullion to one-month lows earlier in the session after the U.S.

Federal Reserve signaled higher interest rates.

Spot gold was steady at $1,737.57 per ounce by 2:15

p.m. ET (1815 GMT). Prices touched their lowest since July 27 at

$1,719.56 earlier in the session.

U.S. gold futures settled flat at $1,749.7.

“Gold sold-off after Powell’s speech and right now the

uptick is due to pure bargain hunting as well a pull-back in

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dollar … Gold will soon start trading in a small range till

further clues from the Fed,” said Bob Haberkorn, senior market

strategist at RJO Futures.

The dollar fell 0.1%, easing off two-decade highs,

making gold less expensive for other currency holders.

In a speech at Jackson Hole, Wyoming, Powell said Fed will

raise rates as high as needed to curb inflation.

Market participants are now largely pricing in a

75-basis-point rate hike at the Fed’s September meeting.

Gold is considered an inflation hedge, but a high-interest

rate environment dims the non-yielding asset’s appeal.

“Gold bulls’ upside price objective is to make a form above

solid resistance at $1,800 and bears’ near-term downside price

objective is pushing futures prices below solid technical

support at $1,700,” said Jim Wyckoff, senior analyst at Kitco

Metals.

Higher benchmark U.S. Treasury yields, capped gains in gold.

“The U.S. is headed into a recession, Fed can’t be

aggressive then; once the market gets further confirmation on

that, gold will start to rise,” Haberkorn added.

Meanwhile, Goldman Sachs slashed UK growth forecast, and

expects a recession to start later in the year.

Spot silver fell 0.5% to $18.79 per ounce, platinum

rose 0.2% to $865.04 and palladium rose 1.5% to

$2,141.91.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by

Krishna Chandra Eluri)



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