Tuesday saw gold prices rise as the dollar fell, but the metal remained close to a 2-1/2-year low as some investors stayed away due to the possibility of more aggressive rate hikes by the US Federal Reserve.
As of 0512 GMT, spot gold was up 0.6% at $1,631.39 per ounce after falling to its lowest level since April 2020 on Monday at $1,620.20.
The price of US gold futures rose by 0.3% to $1,638.70.
The two-decade peak reached in the previous session was eased by the dollar index’s 0.1% decline.
The benchmark 10-year Treasury yield was also just a little bit below a Monday peak that had stood for 12 years.
According to IG market strategist Yeap Jun Rong, slightly lower US rates and the currency may have given gold prices some room to stabilize after their recent sell-off.
“The current upside risk to inflation and, consequently, monetary policy tightening, nevertheless represents a fundamental barrier limiting gold’s upside,” the economist added.
On Monday, Fed policymakers downplayed the increased market volatility and reiterated that managing inflation remained their top concern.
