Gold Rebounds Toward $2,000 After Dollar Drops to Two-Year Low

A worker plunges a gold ingot into a cooling bath at the Uralelectromed Copper Refinery, operated by Ural Mining and Metallurgical Co. (UMMC), in Verkhnyaya Pyshma, Russia, on Thursday, July 30, 2020. Gold surged to a fresh record Friday fueled by a weaker dollar and low interest rates. Silver headed for its best month since 1979. , Bloomberg

(Bloomberg) — Gold is rebounding, with Comex futures climbing back to $2,000 an ounce as the dollar weakened and investors bet U.S. interest rates would stay lower for longer.

The dollar dropped to the lowest in over two years, fueling a broad advance in commodities. Spot gold gained more than 3% over the past three sessions, following its first monthly loss since March, as the Federal Reserve’s new approach on inflation added support. That came after a slowdown in buying from gold-backed exchange-traded funds raised concern that a key driver of the metal’s record rally may be losing momentum.

“Now that month end is out of the way, the underlying trends can resume, one of which is a lower U.S. dollar,” said Shyam Devani, chief strategist at SAV Markets in Singapore. “Broadly, the massive increase in global money supply keeps gold in an uptrend.”


Gold rebounds as Fed’s new inflation strategy boosts investor appetite

The fallout from the US Fed’s new inflation strategy continued on Friday, with investors finding comfort that policy will remain accommodative. This saw the ANZ China Commodity Index ending the session up 0.2%. This capped off a positive week for commodities, with the CCI rising 0.6%. Industrial metals led the complex, with nickel and copper recording strong gains. Precious metals were also stronger, with gold rising 1.3% over the week. Crude oil gained, sending the energy sector higher. Bulk commodities ended the week lower, as iron ore fell. Agriculture was down over the course of the week.