Gold bounces back, but hover near two-month lows over rising dollar, economic recovery optimism
After a five-day slump, gold goes back to the winning track on Thursday in Asia, but its closing price just hovered near to its lowest level in over two months. The modest bounce-back was due to the strengthening dollar and growing optimism for a global economic recovery from the pandemic holding off demand for the safe-haven commodity.
Gold futures gained 0.54% at $1,782.40. Along with gold, platinum and palladium also recovered on Thursday. Silver was kept at its current level. Despite the comeback, gold has dropped over 6% in 2021 after posting its biggest yearly gain in ten years in 2020.
Meanwhile, the dollar rose as encouraging U.S. data were released the previous day. It showed Core retail sales growing by as much as 5.9% month-on-month in January, bouncing back big time from its 1.8% decline in December.
The data also revealed a 1.3% month-on-month increase in the Producer Price Index in January. It lorded over the 0.4% growth forecast and December’s 0.3% improvement. Also, Retail sales showed upbeat figures, posting a 5.3% growth month-on-month in January, following a measly 1.1% growth forecast and December’s 1% decline.