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Gold extended gains as the dollar weakened after US Federal Reserve officials played down prospects of aggressive rate hikes coming imminently.
European stocks and US futures rose on Tuesday, while the dollar ticked lower amid the positive risk sentiment.
Gold managed to regain the psychologically important $1 800 an ounce mark, a level it held near for much of last year.
On Monday, Fed officials including Kansas City’s Esther George and San Francisco’s Mary Daly stressed that they want to avoid unnecessary disruptions to the US economy as they prepare to start raising interest rates.
It suggests little appetite for an aggressive 50 basis-point move in March, the prospect of which put gold under pressure last week. The market will be watching the US jobs report for January closely, out on Friday, for clues on the trajectory for inflation. After bullion fell 2,4 percent last week, the biggest weekly decline since August, it gained 0,3 percent on Monday.
“Gold’s rebound may have gone too far already,” Edward Moya, senior markets analyst at Oanda Corp, wrote in a note, adding that traders were likely to sell into rallies as long as a Fed rate hike looms on the horizon.
The US central bank’s rate-cut focus will be the “constant theme that will disrupt any safe-haven flows that stem from geopolitical concerns or Chinese weakness,” he said. — Bloomberg.
Online Reporter