A gold hook with one kilo is on Gold Investments Ltd. gold trader in this arranged photograph in London, UK, on Wednesday, July 29, 2020.
Chris Ratcliffe | Bloomberg | Getty Images
Gold prices rose on Tuesday and rose from a low of less than eight months, as a retreat in the dollar and US government interest rates lifted demand for safe haven metal.
Spot gold increased 0.8% to $ 1,377.62 per ounce at 1237 am ET (1737 GMT), after dropping to $ 1,706.70 earlier in the session, the lowest since June 15.
US gold futures rose 0.7% to $ 1,734.40 per ounce.
“Gold is rising near session peaks such as returns and the dollar’s decline,” said Tai Wong, a trader at investment bank BMO in New York.
“Gold’s $ 30 rally from the downturn in Asia indicates that investors and short-term speculators are resourceful and also trigger card coverage. A close to $ 1725 per ounce would be considered by many to be an important turning point.”
The dollar index fell 0.2% after reaching a four-week high against its competitors, making gold cheaper for holders of other currencies.
Additional supportive gold, comparable US government interest rates fell from a one-year high last week, while US equities fell after strong gains on Monday.
“The most important dilemma right now for the gold bulls is the rising short-term US government interest rates,” said Bob Haberkorn, senior marketing strategist at RJO Futures.
“Although the US Federal Reserve was very accommodating with stimulus, with low interest rates for a long time, we had to deal with these rising short-term interest rates in the short term.”
While gold is considered a shield against inflation, higher returns threaten that status because they increase the possibility of holding bullion.
Market participants closely followed the $ 1.9 trillion stimulus bill, which will be debated in the US Senate this week.
Silver gained 0.9% to $ 26.72 per ounce, after falling to less than a month.