Gold prices recovered from a five-week low reached in the previous trading session, although gains remained limited as higher crude oil prices continued to fuel inflation concerns and cloud the outlook for US interest rates, News.Az reports, citing Al Jazeera.
Spot gold rose 0.5 percent to $4,543.33 per ounce by 06:15 GMT after falling more than 2 percent on Monday. US gold futures for June delivery also edged up 0.4 percent to $4,553.10.
“Prices seem to be digesting a bit after the return of the ‘war trade’ across markets sent gold lower Monday,” said Ilya Spivak, head of global macro at US-based Tastylive.
However, further gains were restrained as US Treasury yields and the dollar moved higher, supported by a rebound in crude oil prices that revived inflation fears.
According to Spivak, this dynamic weighed on gold, which does not generate interest and is often considered a hedge against currency risk.
While gold is traditionally viewed as a hedge against inflation, higher interest rates tend to increase the attractiveness of yield-bearing assets, reducing demand for the precious metal.
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