Gold, which had recently touched a five-month low, managed a slight rebound on Friday as the dollar and bond yields receded. Although the precious metal is still poised for another weekly decline, the dollar’s retreat from recent highs created a window for some bargain hunting, propelling gold’s slight recovery.
Spot gold rose by 0.2% to reach $1,892.30 per ounce, a response to the previous day’s dip to mid-March levels. Concurrently, U.S. gold futures experienced a 0.4% increase, reaching $1,922.90.
Tim Waterer, Chief Market Analyst at KCM Trade, remarked, “The U.S. dollar has eased from recent highs and this has allowed gold to make a modest move higher. There is likely some bargain hunting happening for the precious metal at these levels.”
The retreat of benchmark 10-year U.S. Treasury yields from their October highs contributed to gold’s resurgence, as it made non-yielding bullion more appealing. However, market analysts underscored the necessity for the dollar to exhibit a more bearish trajectory for gold to regain its strength.
The impending central bankers’ conference in Jackson Hole, Wyoming, is set to guide market participants on the course of interest rates. Investors are keen to discern whether the Federal Reserve will adopt a more hawkish stance, reflecting the current market perception of an increased likelihood of further rate hikes.
Bearish sentiment among investors was evident through the largest gold-backed exchange-traded fund, SPDR Gold Trust, which experienced a drop of 6.93 metric tons in holdings, marking the largest decline since July last year. With holdings now at 887.50 metric tons, the lowest since January 2020, this trend underscores the ongoing cautiousness in the market.
Other precious metals followed a similar trajectory. Spot silver increased by 0.4% to $22.78, while platinum and palladium both registered gains of 0.6% and 0.4% respectively. However, these metals are also facing weekly declines due to investor sentiments. The moderating growth in auto sales across regions has led to a decline in Platinum Group Metals investments, according to ANZ analysts.
