Gold gains after fifth straight week of losses

Gold prices rallied on Monday as a weaker dollar helped gold recover some of its recent losses as easing fears of a 100 basis point rate hike by the US Federal Reserve also provided support.

Gold for August delivery gained 0.4% to settle at $1,710.20 an ounce.

September silver gained 1.3% to close at $18.84 an ounce.

The dollar index retreated from a near 20-year high, down 0.3%, making dollar-denominated gold less expensive for buyers holding other currencies.

“Markets are dropping the odds of a 100 basis point Fed rate hike at its July policy meeting, which translates into some measure of relief for gold,” said Han Tan, chief market analyst at Exinity.

U.S. consumers moderated their inflation expectations in July alongside a sharp drop in gasoline prices last month, a development likely to be welcomed by Federal Reserve officials who worry that high inflation expectations could be embedded and complicate their task of limiting price increases.

The Fed’s aggressive policy to fight inflation has hurt gold’s appeal, as rising interest rates have made the asset look less attractive.

“However, with a 75 basis point move now looking more likely, the US dollar has weakened slightly from last week’s record, providing relief to equity and commodity markets,” said Rupert Rowling, market analyst at Kinesis Money.

Fed officials signaled on Friday that they would hold off on raising interest rates by 75 basis points. at their meeting on 26-27 July.

As for other metals, September copper gained 3.8% to $3.575 a pound. October platinum added 2.2% to $849 an ounce, while September palladium added 0.5% to $1,839 an ounce.