US Markets

Gold recoups early losses as dollar eases

Credit: REUTERS/HEINZ-PETER BADER

Gold prices changed course to rise on Monday as the dollar dipped, making bullion cheaper for holders of other currencies, but hopes for progress in the treatment of COVID-19 limited further gains in the safe-haven metal.

* World stocks gain for second session

* Investors eye Fed Chair's address at Jackson Hole, Wyoming

* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Adds comments, recasts, updates prices)

By Diptendu Lahiri

Aug 24 (Reuters) - Gold prices changed course to rise on Monday as the dollar dipped, making bullion cheaper for holders of other currencies, but hopes for progress in the treatment of COVID-19 limited further gains in the safe-haven metal.

Spot gold was up 0.4% at $1,947.38 per ounce by 0955 GMT, off an earlier low of $1,929.69, while U.S. gold futures were 0.5% higher at $1,955.80.

"The dollar is softer today and if we look at the larger picture, the world economy is still trying to recover from the effects of coronavirus," said Saxo Bank analyst Ole Hansen.

"Along with that, the risk of inflation continues to attract investors to gold."

The dollar index was down 0.4% after climbing to a more than one-week high in the previous session.

Investors are eyeing U.S. Federal Reserve Chairman Jerome Powell's address to the bank's annual symposium in Jackson Hole, Wyoming, on Thursday for signs of how aggressively it will seek to handle the long-term recovery from the pandemic.

"The U.S. central bank should reiterate its pledge for ultra-low rates, providing some support for gold," Avtar Sandu, a senior commodities manager at Phillip Futures, said in a note.

"(It) may be expected to signal greater tolerance for above-target inflation, keeping real interest rates low."

Lower U.S. interest rates cut the opportunity cost of holding non-yielding bullion.

Central banks worldwide have rolled out massive stimulus measures to alleviate the economic damage caused by the COVID-19 pandemic, but that has also increased the probability of rising inflation.

Restricting gold's advance, equity markets gained for a second straight session after the U.S. Food & Drug Administration authorised the use of blood plasma from patients who have recovered from COVID-19 as a treatment for the disease.

Silver rose 0.4% to $26.79 per ounce, platinum edged up nearly 1% to $927.40 and palladium fell 0.5% to $2,171.33. (Reporting by Diptendu Lahiri and Brijesh Patel in Bengaluru; Editing by Jan Harvey) ((Diptendu.Lahiri@thomsonreuters.com; within U.S. +1 651 848 5832; outside U.S. +91 80 6749 3683;; Reuters Messaging: diptendu.lahiri.thomsonreuters.com@reuters.net)) Keywords: GLOBAL PRECIOUS/ (UPDATE 4)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Markets Videos

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More