Gold prices rose more than 1% on Monday after falling in the previous two trading sessions, although risks remained from an imminent US Federal Reserve (Fed) rate hike.
The gold spot was up 1.2% at $1,661.85 per ounce by 10:32 am EDT (1432 GMT), breaking away from the more than two-week lows touched in the last trade.
US gold futures rose 1.2% to $1,668.00.
“The dollar has fallen significantly and yields have fallen,” said Bob Havercohn, senior market strategist at RJO Futures.
The dollar fell 0.8% and US Treasury yields fell as bullion prices became cheaper for foreign buyers. [USD/][US/]
However, “It’s hard for gold to recover, even though there are many question marks in the world. Investors are looking for safety, but why not invest in U.S. Treasuries, where interest rates are rising rapidly?” It’s difficult,” said Haberkorn. Added.
Gold faces headwinds as the Fed continues its rate hike trajectory and is expected to raise the benchmark overnight rate by at least 75 basis points at its next policy meeting to curb stubbornly high inflation.
Prices have fallen 20% since crossing $2,000 a major ounce in March.
Gold is seen as a hedge against inflation, but rising interest rates have made the non-yielding asset less attractive.
TD Securities said in a report: “In the short term, however, the recovery in risk assets, fueled by signs of stabilization in the gold coin, is increasing pressure on short selling of precious metals, while the price of gold extends its short squeeze. to exceed $1,750 an ounce.” .
Elsewhere, the silver spot rose 2.3% to $18.68 an ounce after eight consecutive days of declines. Platinum rose 1.8% to $914.68 and palladium rose 1.3% to $2,013.94.
“A surplus palladium market in 2023 will ultimately lead to lower palladium prices, but the market remains tight in the short term,” Heraeus Precious Metals said in a memo.
(Reporting by Kavya Guduru, Bangalore; Editing by Paul Simao)
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