Precise Investors Editorial Team
Spot gold gained 1.5% to $4,717.49 per ounce, rebounding from a near two-month low hit in the previous session
Gold prices rose on Friday on technical buying, but were headed for a third straight weekly decline, pressured by a firm dollar and as a hawkish U.S. central bank dampened hopes for near-term interest rate cuts.
Spot gold gained 1.5% to $4,717.49 per ounce as of 0530 GMT, rebounding from a near two-month low hit in the previous session.
U.S. gold futures for April delivery added 2.4% to $4,716.80.
Gold held some important technical supports in the weekly time frame and gold may see a recovery to the level where it broke down, around $4,800, said Nicholas Frappell, global head of institutional markets at ABC Refinery.
However, bullion has shed more than 6% so far this week. Spot gold has dropped more than 10% since the U.S.-Israeli strike on Iran on February 28.
The dollar has emerged as one of the clearest “safe-haven” winners, strengthening over 2% so far this month. Meanwhile, the U.S. central bank kept rates steady on Wednesday, echoing other central banks, and indicated that inflation could rise.
Interest rate futures show traders see little chance of a Fed cut this year, according to the CME’s FedWatch tool.
Gold is considered an inflation hedge, but high interest rates tamp down on demand as yield-bearing assets turn more attractive, while a stronger dollar makes the bullion more expensive for holders of other currencies.
After notable underperformance during the Middle East conflict, participants were poised to sell rather than buy gold and were listening out for a reason to confirm their sentiments, Frappell said.
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