Gold: Recovery from one-year low remains fragile – ING

ING commodities strategists Warren Patterson and Ewa Manthey say Gold rebounded 1.85% after last week’s sharp sell-off, helped by lower Oil prices and bargain hunting. The metal recovered from a one-year low as easing US-Iran tensions reduced inflation concerns, but they caution that higher rate expectations and a stronger Dollar limit the scope for a sustained recovery.

Bounce tempered by rates and Dollar

"Gold rebounded on Monday after last week’s sharp sell-off, helped by the pullback in oil prices and bargain hunting at lower levels."

"The precious metal settled 1.85% higher on the day, recovering from its lowest level in a year, after signs of easing US-Iran tensions sent crude sharply lower."

"The drop in oil eased some of the inflation concerns weighing on gold, providing additional support."

"The recovery follows a difficult period for gold. It's caught up in a broader risk-off move and heavy selling across technology stocks. Geopolitical risks remain elevated, while expectations for higher interest rates weigh on sentiment."

"We expect gold to regain some ground following its recent correction. But the near-term outlook remains challenging amid expectations for higher rates and a stronger dollar, limiting the scope for a more sustained recovery."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)