(Bloomberg) -- Gold slipped after posting its biggest gain in more than a month as the US dollar edged up, with investors weighing renewed concerns over economic growth amid tightening monetary policy.
Bullion is heading for its first weekly advance -- albeit a marginal one -- in six weeks as a gauge of the greenback retreated from a record hit on July 14. Fears of a recession are mounting as data Thursday showed jobless claims at an eight-month high and a slump in one regional factory outlook. One index of leading economic indicators is pointing to a contraction.
“We are finally starting to see some weakness in the US dollar index, as gold bounces off an oversold level, recovering above $1,700 for now,” said John Feeney, business development manager at Sydney-based bullion dealer Guardian Gold Australia. “We now expect this initial flight to the US dollar to start rotating back into gold as investors search for a true and reliable hedge against inflation.”
Investors will closely watch the Federal Reserve’s meeting on July 26-27 for clues on its monetary policy path. On Thursday, the European Central Bank raised its key interest rate by 50 basis points, the first increase in 11 years, as it confronts surging inflation. Traders were also monitoring President Joe Biden’s condition after he tested positive for Covid and showed mild symptoms.
Spot gold declined 0.3% to $1,713.81 an ounce at 12:46 p.m. in Singapore. Prices rose 1.3% Thursday after first dropping to the lowest intraday level since March 2021. The Bloomberg Dollar Spot Index rose 0.2% to pare a weekly decline. Silver fell, while platinum was little changed and palladium climbed.