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Gold gains as dollar slide amid growth worries sap risk taking

19 May 2022 5:02 pm
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Mumbai, 19 May (Commoditiescontrol): Gold prices bounced back on Thursday as a drop in U.S. dollar and Treasury yields coupled with a slide in risk assets rekindled demand for the safe-haven bullion amid worries about global growth.

Spot gold jumped 0.8 percent to $1,829.20 per ounce, while U.S. gold futures rose 0.7 percent to $1,827.70.

Making bullion cheaper for overseas investors, the dollar slid 0.3 percent, while U.S. Treasury yields dropped to their lowest in a week.

European shares also slumped on Thursday, following a sharp sell-off on the Wall Street overnight, prompting investors to seek safety of gold.

Gold prices dropped to a near four-month low earlier this week and are up about 2 percent since the dollar backtracked from 20-years highs.

Gold's reputation as an inflation hedge is being countered by an aggressive policy stance taken by central banks to fight soaring prices. Non-yielding gold tends to fall out of favour among investors when interest rates rise.

Fed Chair Jerome Powell this week pledged the U.S. central bank would ratchet up rates as high as needed to combat red-hot inflation.

Still, concerns about global economic growth, fuelled by sustained inflation and heightened geopolitical risks, should protect the gold price somewhat.

In other metals, spot silver gained 0.7 percent to $21.53 per ounce, and platinum was up 0.1 percent at $935.93, while palladium dropped 1.8 percent to $1,979.38.

(By Commoditiescontrol Bureau: +91-22-40015505)

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