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Home Gold Prices Gold Prices Edge Up Amid Steady Dollar and Recession Concerns (August 7)

Gold Prices Edge Up Amid Steady Dollar and Recession Concerns (August 7)

by anna

Gold prices experienced a slight uptick in Asian trading on Wednesday, recovering from sharp losses in the previous session as the US dollar steadied. The market’s focus remains on the potential for a U.S. recession and the prospect of lower interest rates.

Gold Market Movements

Spot gold increased by 0.2% to $2,393.59 per ounce, while gold futures for December delivery rose 0.1% to $2,433.70 per ounce by 00:47 ET (04:47 GMT). The slight rise in gold prices follows a sharp decline on Tuesday when the yellow metal approached a record high earlier in the week.

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The initial boost in gold came from safe-haven demand, driven by a hawkish stance from the Bank of Japan and fears of a U.S. recession, which led to significant losses in risk-driven assets, especially stocks. However, a rebound in global stock markets on Tuesday and Wednesday pressured safe-haven assets like gold. The renewed risk appetite was spurred by bargain buying and hopes for a shallow U.S. recession.

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Impact of Interest Rates

The prospect of significant U.S. interest rate cuts, particularly amidst recession fears, also played a role in sustaining risk appetite. While lower rates tend to boost gold prices by reducing the opportunity cost of holding non-yielding assets, the rebound in stock markets temporarily overshadowed this effect.

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Other Precious Metals

Other precious metals also recouped losses from the previous session. Platinum futures surged 1% to $928.95 per ounce, and silver futures rose 0.3% to $27.290 per ounce, reflecting a recovery in the broader precious metals market.

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