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Losses for gold due to the recovery of the dollar

Gold futures traded lower on Tuesday as the dollar reversed some of its losses, while appetite for more risky assets resurfaced as investors looked beyond the financial risks posed by the Omicron variant.

Gold futures for February delivery fell 0.3% to $ 1,788.70 an ounce.

The dollar recovered some losses overnight, while the risk-taking climate recovered in part after a selloff in world markets.

“However, the precious metal could attract new supply in 2022 if inflation expectations remain persistently high,” said Han Tan, chief market analyst at Exinity.

Gold is often seen as a hedge against large changes in consumer prices, but interest rate hikes can reduce inflationary pressures while reducing the attractiveness of gold.

However, “gold investors still lack the courage to face any kind of loss, as evidenced by the recent rapid decline in the rally above $ 1,800,” said Jeffrey Halley, senior market analyst at OANDA, adding that gold has not the potential to break away from current boundaries.

March delivery was up 1.1% at $ 22.52 an ounce, palladium was up 2.7% at $ 1,793.10 and platinum was up 0.2% at $ 927.80.

Palladium could benefit from the expectations of limited car demand, said Bob Haberkorn, Senior Strategy Officer at RJO Futures.

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