Gold Rises From Two-Year Low As Strong Dollar Stalls

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(Bloomberg) — Gold fell from its lowest level in more than two years as the dollar retreated after hitting a new all-time high.

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The Dollar’s advance halted on Tuesday, providing relief to the non-interest-bearing metal. While gold is seen as a traditional safe haven in times of economic distress, fears of a global recession fueled by central bank monetary tightening instead sparked strong gains for the greenback.

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The fall in other major currencies, including the pound and the yen, could continue to weigh on dollar-denominated commodities. Energy and commodities markets were also hit as the key Bloomberg Commodity Spot Index fell to the lowest since February.

“The dollar movement is not over and that should keep the pressure on bullion,” said Ed Moya, senior market analyst at Oanda. « Gold is struggling in this environment as many investors are very tempted by two-year Treasury bills. »

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This week, the market could face further volatility following the release of U.S. inflation data and public speeches by Fed officials, including Vice Chairman Lael Brainard and Chairman of the New York Fed, John Williams.

Bullion is in a bear market after falling 20% ​​from a 2020 record. Metal price movements generally have a negative correlation with the dollar and interest rates, as it is valued in US currency.

Spot gold rose 0.4% to $1,628.69 an ounce at 8:06 a.m. in Singapore. The Bloomberg Dollar Spot Index fell 0.2%, following Monday’s 1% gain. Silver, platinum and palladium all pink.