NEW YORK: Gold recovered some ground on Monday, lifted by a retreat in the dollar as the market toned down the chances of a 100-basis-point rate hike by the US Federal Reserve next week. Spot gold was up 0.2 per cent at $1,709.87 per ounce by 1:58pm ET (1758 GMT), after rising 1pc earlier in the session.

US gold futures settled up 0.4pc at $1,710.20. Last week, bullion hit its lowest level in nearly a year due to the dollar’s rampant rise, which made gold more expensive for holders of other currencies. “We are seeing quite a nice rebound for gold as the dollar is weaker,” Edward Moya, senior analyst with OANDA, said.

Gold investors now a little optimistic as the debate is now between a 50 and 75 bp hike by the Fed, Moya added. The dollar index eased 0.7pc on Monday, slipping from its near 20-year high. Data on Friday showed US consumers tempered their inflation expectations in July, a development likely to be welcomed by Fed officials worried that expectations for high inflation could complicate their task of reining in price increases.

Published in Dawn, July 19th, 2022