Gold recoups some losses as US dollar steadies
[BENGALURU] Gold on Thursday recouped some of the previous session's hefty losses as the US dollar steadied, although gains were capped by an uptick in risk appetite on recent better-than-expected economic data.
Spot gold was up 0.2 per cent at US$1,945.59 per ounce by 3.40am GMT, after falling 1.4 per cent on Wednesday in its biggest one-day drop since Aug 19 on a firmer dollar and rebound in US manufacturing activity.
US gold futures rose 0.4 per cent to US$1,952.20.
"Gold is tracking inversely the moves in the dollar... and part of the reason gold has not capitalised as much after Jackson Hole is risk appetite seems strong," said DailyFx currency strategist Ilya Spivak.
"Although there is positive growth, the overall economy is still very very weak in absolute terms and central banks are expected to remain dovish, which should be supportive for gold." The dollar index held steady against a basket of major currencies after rising 0.6 per cent in the last session.
Meanwhile, data showing a sustained recovery in China's services sector and the prospect of additional US stimulus whetted risk appetite, limiting gold's appeal.
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The US Federal Reserve, in its "Beige Book" report, highlighted that US business activity and employment ticked up through late August, but economic growth was generally sluggish as Covid-19 hotspots hampered reopening efforts.
Gold has gained about 28 per cent so far this year, helped by ultra-loose monetary policy adopted by major central banks to mitigate the economic damage caused by the Covid-19 outbreak, which has infected nearly 26 million people worldwide so far.
Lower interest rates decrease the opportunity cost of holding non-yielding bullion.
Investors now await the initial weekly US jobless claims report due later in the day, as well as US payroll figures on Friday, for future direction.
Elsewhere, silver gained 0.1 per cent to US$27.52 per ounce and platinum rose 0.5 per cent to US$910.47, while palladium eased 0.1 per cent to US$2,244.76.
REUTERS
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