Gold finds reprieve after selloff as dollar rally cools
Friday, 8 July 2022
Gold rose on Thursday as the dollar pulled back slightly and some investors scooped up bargains after two sessions of heavy losses that plunged prices below the crucial $1,800 level, reports Reuters.
Spot gold rose 0.4 per cent to $1,744.69 per ounce by 1218 GMT. It has declined by more than $300 since the Federal Reserve began raising interest rates in March to tame unruly inflation, raising the opportunity cost of holding non-yielding bullion.
US gold futures were up 0.3 per cent at $1,742.10.
"There's a modest recovery (in gold) after a significant fall as bargain hunters come into the market. But direction of travel though is clear, that bears are in control and likely will push lower until physical buyers establish a price floor," said independent analyst Ross Norman.
"Gold is also seeing some relief from a correction in the US dollar, which appears to be topping out, although this is partially offset by modestly higher 10-year Treasury Yields."
The dollar index eased 0.2 per cent, making bullion more appealing to overseas buyers.
Meanwhile, the European Central Bank policymakers debated flagging a larger interest rate hike for July, accounts of their June policy meeting showed.
The Fed minutes, on the other hand, revealed their concern that worsening inflation would erase faith in the central bank's ability to control inflation.