By 18:22 GMT on Thursday, spot gold was up 0.3% to $1,890.90. Earlier in the day, it fell to $1,871.81, its lowest level since February 17th. Gold futures in the United States ended the day at $1,891.30, up 0.1%.
“There has been a minor increase in prices as a result of some short covering following recent losses. Short-term traders are recouping some of their losses on their short positions “Jim Wycoff, a senior analyst at Kitco, agreed.
“Gold has recently seen additional downside as the US dollar index has reached new highs and bond yields have risen… The economy is still doing well, but inflation must be brought under control.”
The dollar index rose to its highest level since December 2002 on Thursday, despite widespread weakening among its major competitors.
“The dollar is expected to stay in demand after the Fed hikes interest rates by 50 basis points and probably 75 basis points in the next two sessions following May 4… It’s quite difficult to be bullish on gold right now.” – Fawad Razaqzada, a City Index market expert, stated.
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On predictions of aggressive monetary policy tightening by the US Federal Reserve and a stronger currency, gold has dropped nearly 2.7% this month, which might be its worst monthly drop since September.
The potential cost of storing non-yielding bullion will rise as interest rates rise quickly.
The US economy shrank in the first quarter, owing to a return in COVID-19 infections and a decrease in government pandemic aid. Meanwhile, weekly unemployment claims decreased by 5,000 to 180,000.
Spot silver, for example, sank 0.8% to $23.10 per ounce, its lowest level since February 11.
Palladium jumped 1.1% to $2,227.15 per ounce, while platinum advanced 0.3% to $919.92 per ounce.
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