Tuesday, August 16, 2022
HomeFinanceGold eases as dollar gains, recession fears ebb; silver rises 0.2%

Gold eases as dollar gains, recession fears ebb; silver rises 0.2%

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By Arundhati Sarkar



(Reuters) – Gold slipped on Wednesday as gains in the dollar and reduced recession fears on expectations of Russian gas supplies to Europe resuming soon dented safe-haven bullion’s appeal.


Spot gold was down 0.2% at $1,708.09 per ounce by 1126 GMT in rangebound trading. U.S. gold futures eased 0.3% to $1,706.40.


“Gold is being negatively impacted by the current ‘risk on’ mood with very strong gains being seen in the equity markets,” independent analyst Ross Norman said. [USD/] [US/]


World shares hit a three-week high on strong U.S. corporate earnings and reduced worries over a possible recession. [MKTS/GLOB]


“This is manifesting itself through large redemptions in the ETF market as institutional investors scale back bullion positions,” Norman added. [GOL/ETF]


Gold prices had a positive start to the week, after five straight weekly declines, as expectations of a full percentage point interest rate increase by the Fed started to fade. Higher rates dull appeal for non-yielding bullion.


But gold has not been able to fully capitalise on its safe-haven status recently, with prices declining over $350 since early March due to the Fed’s aggressive monetary tightening, and the dollar’s recent rally.


A stronger dollar makes greenback-priced bullion expensive for overseas buyers.


“It does seem at the moment that the attractive position for gold traders is to position themselves for a recovery as $1,650 to $1,700 appears to be a good medium term floor,” said David Jones, chief market strategist at Capital.com.


Meanwhile, British inflation in June accelerated to a 40-year peak, bolstering chances of a half-percentage-point Bank of England rate hike next month.


The European Central Bank policymakers are also considering a larger-than-expected 50-basis-point hike on Thursday.


Spot silver rose 0.2% to $18.77 per ounce, while palladium fell 0.8% to $1,860.21.


Platinum was little changed at $874.61.


 


(Reporting by Arundhati Sarkar in Bengaluru; Editing by Bernadette Baum and Vinay Dwivedi)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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