Gold gains on bargain hunting after sharp losses, softer dollar

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Gold prices edged up on Thursday as the

dollar eased slightly and some investors scooped up bargains

after sharp losses in the previous two sessions.

Spot gold rose 0.2% to $1,741.75 per ounce by 0843

GMT.

Gold prices have fallen over $300 since March after the U.S.

Federal Reserve raised interest rates to rein in soaring

inflation, increasing the opportunity cost of holding

non-yielding bullion.

U.S. gold futures were up 0.2% to $1,739.80.

“Gold’s recovery this morning is looking like a dead cat

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bounce… The direction of travel though is clear, that the

bears are in control and likely will push lower until physical

buyers establish a price floor,” said independent analyst Ross

Norman.

“Gold is also seeing some relief from a correction in the

U.S. dollar which appears to be topping out, although this is

partially offset by modestly higher 10-year Treasury Yields,”

Norman added.

Minutes of the Fed’s June meeting – when policy makers

tightened by 75 basis points, the most since 1994 – released

Wednesday revealed their concern that worsening inflation would

erase faith in its ability to control it.

U.S. markets received little solace but more clarity from

the FOMC minutes, Jeffrey Halley, senior market analyst, Asia

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Pacific, OANDA, wrote in a note. He added it is clear the

committee members remain “highly focused on culling inflation,

even if it was at the expense of a sharp economic slowdown.”

The dollar index ticked down 0.2% after reaching a

near 20-year high on Wednesday, lending support to

greenback-priced bullion.

Traders now await Friday’s broader labor market data, which

can provide a fuller picture of the state of the world’s biggest

economy.

Spot silver rose 0.6% to $19.29 per ounce, platinum

was up 0.1% to $856.74 and palladium climbed 1.3%

to $1,929.61.

(Reporting by Arundhati Sarkar and Brijesh Patel in Bengaluru;

Editing by Krishna Chandra Eluri)