A slight weakening in the dollar has given gold the opportunity to recover some of the ground it lost last week and be trading comfortably above $1,700 an ounce at around $1,720.
More cautious comments from Federal Reserve officials have dialled back expectations that the US central bank will hike interest rates by 100 basis points when the committee meets at the end of this month. Some hawkish comments by other Fed committee members had proven the catalyst for gold to sink to its lowest level in 11 months as well as register its fifth consecutive week of declines.
Live Gold Price – $/oz
However, with a 75 basis point move now looking likelier, the US dollar has weakened slightly from the record it hit last week, providing relief across equity and commodity markets.
Nonetheless a strong dollar allied by central banks seeking to continue increasing interest rates presents a challenging environment for gold to make much headway and after the dramatic plunges of recent weeks, it is hard to see how the precious metal can gain sufficient momentum to climb back above $1,800 an ounce.
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