Gold recovers after falling
Gold rose on Tuesday, recovering from a steep drop last week triggered by the Federal Reserve’s hawkish response as the market awaited new data on inflation expectations.
Fed policymakers reiterated on Monday that they want to avoid causing unnecessary disruption to the US economy as they prepare to begin raising interest rates, implying that they have little desire for a 50-basis-point hike.
Gold’s 2.4% drop was the biggest weekly drop since August
The market will be watching the US jobs report for January, which is expected out on Friday, for clues about inflation’s trajectory. The metal climbed 0.3 percent on Monday after losing 2.4 percent last week, the worst weekly decrease since August.
“Perhaps the gold rally has went too far, and traders are likely to sell on the upside as a Fed rate hike approaches.” “Any safe-haven flows originating from geopolitical fears or Chinese weakness will be disrupted by rate decreases by the US central bank,” said Edward Moya, senior market analyst at Oanda Corp.
In early Sydney trading, spot gold was practically steady at $1,797.08 per ounce. Silver was constant, while platinum and palladium rose slightly and fell marginally, respectively.