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Gold Ticks Higher as Dollar Takes a Breather

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Gold has continued its recovery, edging higher on Thursday, with other top metals also making significant gains. Gold’s renewed resurgence comes after the U.S. dollar took a breather following Tuesday’s spike. 

While spot gold saw modest gains on Thursday, rising 0.1% to trade at $1,769 an ounce, gold features performed better by rallying 0.4% to trade at $1,785.40 an ounce.  And like we stated earlier, it isn’t only gold enjoying a good run on Thursday as platinum futures have also rallied 0.1%, now trading at $891.10. Similarly, silver features rose 0.6%, recovering some ground after losing nearly 1% value in the past two days. 

The renewed surge in precious metals is coming after the greenback took a break following a two-day rally. The Dollar Index rose by nearly 1% in the last couple of days, supported by hawkish comments from the Fed, suggesting that there could be more interest rate hikes this year to manage the inflation situation. According to Chicago and San Francisco Fed Presidents Charles Evans and Mary Daly, inflation is still at a record high, and the Fed will continue to increase rates to manage rising prices. 

Also, the current U.S.- China standoff is increasing safe-haven demand for the U.S. dollar. In the meantime, the U.S dollar Index is down by 0.1%, while the U.S. Dollar Index Futures is experiencing a similar fate. 

Gold’s future outlook

Despite gaining some ground in the last couple of weeks, the future outlook presents little hope for gold, especially since the Fed would still raise interest rates later this year. Likewise, other precious metals will also come under sustained downward pressure should the Fed continue to increase rates to manage inflation. 

While most metals are seeing modest gains today, Copper futures fell by 0.2% to trade at $3,4710 a pound. Copper prices have continued to edge lower this week, pressured by weak manufacturing PMI from different economies. With weakening factory data expected to play out for the next couple of months, industrial metals like Copper, Zinc, and Nickel may continue on a downward trajectory. 

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