Gold rebounds from three-week low as dollar rally pauses
· Gold gained on Thursday from a three-week low hit in the previous session, as the U.S. dollar and Treasury yields eased, while President Joe Biden’s $2 trillion-plus jobs plan further supported the metal’s appeal as a hedge against inflation.
· Spot gold rose 0.6% to $1,717.60 per ounce by 0746 GMT, after touching its lowest since March 8 at $1,677.61 on Wednesday. U.S. gold futures were up 0.2% at $1,718.90 per ounce.
· “It largely seems to be driven by the dollar index. We’ve seen some easing back in the dollar. So, I think that’s helping gold,” said Harshal Barot, a senior research consultant for South Asia at Metals Focus.
· The dollar index pulled back after hitting a five-month high on Wednesday, making gold less expensive for holders of other currencies.
· On Wednesday, Biden announced his second multitrillion-dollar legislative proposal in two months in office, including $621 billion to rebuild infrastructure.
· “The probability that inflation will rise is definitely something that many investors would be watching. So that is an underlying support to gold, but the market still lacks clarity in terms of how the packages will be funded,” Barot added.
· For a reversal in the dollar recovery and gold’s downtrend, “probably have to see market participants pricing in a better outlook for the European economy, and for the Asian region as well,” said IG Market analyst Kyle Rodda.
· Spot gold faces resistance at $1,716 per ounce and it may hover below this level for a day or retreat to $1,691, according to Reuters technical analyst Wang Tao.
· Elsewhere, silver was up 0.1% at $24.42, while platinum rose 0.3% to $1,190.75 and palladium climbed 0.3% to $2,625.75.
Reference: Reuters
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