Gold prices firm as dollar rally pauses
MG News | July 07, 2022 at 09:43 AM GMT+05:00
July 07, 2022: Gold prices edged up on Thursday from nine-month lows touched in the previous session after a break in the dollar's rally alleviated pressure on bullion, but analysts warned that the relief was likely to be temporary.
Spot gold firmed 0.3% to $1,744.19 per ounce by 0303 GMT, as the dollar dipped slightly from the 20-year highs reached on Wednesday, lending support to greenback-priced bullion.
U.S. gold futures rose 0.3% to $1,741.80.
"With momentum pointing south, dip buyers are effectively trying to catch a falling knife," said Matt Simpson, senior market analyst at City Index.
"$1,721 and $1,700 are potential levels of support for bulls to consider taking a punt.. but until the dollar tops, it likely is a punt."
In the prior session, strength in the dollar pushed bullion down as much as 1.9% to its lowest level since Sept. 30 at $1,731.00.
"This decline has room to continue," Ilya Spivak, a currency strategist at DailyFX said, adding that if gold falls through support at $1,715 per ounce, it could head under the $1,700 figure to the vicinity of about $1,680.
A deteriorating inflation situation prompted Federal Reserve officials to rally around an outsized interest rate increase, minutes of the U.S. central bank's June 14-15 policy meeting showed on Wednesday.
Trading in gold has been volatile over the past month as traders awaited a fresh catalyst for prices, which were hemmed into a range by support from a worsening economic outlook and the weight of an elevated dollar.
Higher interest rates and bond yields lift the opportunity cost of holding non-yielding bullion.
World equities on Thursday were caught between growth worries and relief that a slowdown might put the brakes on interest rate hikes.
Spot silver rose 0.7% to $19.32 per ounce, platinum gained 0.2% to $857.53, and palladium climbed 1.2% to $1,927.92.
Reuters
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