Wednesday, July 6

Gold dips as dollar attempts recovery


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Gold edged lower on Tuesday, as the US

dollar rebounded slightly after a slide in the previous session,

weighing on demand for greenback-priced bullion.

Spot gold fell 0.2% to $1,850.40 per ounce, as of

0240 GMT, after rising to its highest since May 9 of $1,865.29

on Monday. US gold futures were flat at $1,848.20.

The safe-haven dollar clawed back some of its

overnight losses. A stronger dollar makes bullion more expensive

for overseas buyers.

“The weaker dollar has helped gold break back above its

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200-day average… and we’re not yet convinced the greenback has

seen a low,” City Index senior market analyst Matt Simpson said.

Kansas City Federal Reserve Bank President Esther George

said on Monday she expects the US central bank to lift its

target interest rate to about 2% by August, with further action

dependent on how both supply and demand are affecting inflation.

Bullion, seen as a safe store of value during times of

economic crises, tends to become less attractive to investors

when US interest rates are raised because it yields nothing.

“Gold continues to look oversold to my eyes and the daily

close (on Monday) above the 200-day average is constructive for

bulls,” Simpson said.

SPDR Gold Trust , the world’s largest gold-backed

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exchange-traded fund, said its holdings rose 0.44% to 1,068.07

tonnes on Monday from 1,063.43 tonnes on Friday.

Benchmark US 10-year Treasury yields eased, limiting

losses in zero-yield gold.

Spot silver dipped 0.3% to $21.71 per ounce, and

platinum eased 1.3% to $946.00, while palladium

edged up 0.1% to $1,994.50.

Russia’s Nornickel on Monday cut its estimate for the global

palladium market deficit in 2022 due to lower demand from the

car industry amid the Ukraine crisis and a slow recovery of the

chip market from shortage.

(Reporting by Bharat Govind Gautam in Bengaluru; Editing by

Sherry Jacob-Phillips and Rashmi Aich)

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