Gold steadies on dollar pullback; Fed rate increase fears weigh
Gold prices edged higher on Thursday due to a slight pullback in the dollar and bond yields, although gains were kept in check by evidence of a resilient U.S. economy that could offer room for the Federal Reserve to raise interest rates further.
Spot gold ticked 0.1% higher to $1,838.59 per ounce by 0920 GMT, after hitting its lowest level since early January on Wednesday. U.S. gold futures rose 0.2% to $1,848.50.
Benchmark U.S. 10-year Treasury yields eased, while the dollar slipped 0.3% against its rivals after hitting a near six-week peak on Wednesday, making gold cheaper for other currency holders.
“Gold is seeing a ‘dead cat bounce’ or a temporary recovery after a significant decline on some bargain hunting. Recession fears are lending some support to the gold market as is a modest correction in the dollar,” said independent analyst Ross Norman.
For now, the path of least resistance is lower and bears have the upper hand, Norman added.
Gold prices have fallen 4.6% this month and it is set for the biggest monthly drop since June 2021 if losses hold.
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