Gold rose on Thursday on a softer dollar, consolidating further above the key $1,900 level after a dramatic retreat earlier this week from an all-time high.
Spot gold was up 0.6% at $1,929.13 per ounce by 0708 GMT, a day after slipping below the $1,900 level in choppy trade. Prices hit a record high of $2,072.50 on Friday. U.S. gold futures eased 0.5% to $1,938.90.
The dollar slipped 0.2% against rivals, making gold cheaper for holders of other currencies.
“The fall that took gold below $1,900 has flushed out a lot of weak longs and it looks like now we’re going for a bit of consolidation and gold is preparing for another move higher,” said Michael McCarthy, chief strategist at CMC Markets.
“The outlook remains positive in a lower interest rate environment, particularly with the weakening U.S. dollar. The settings are unchanged, we’re seeing record amount of stimulus and have real fears about the risks to growth.”
Massive money-printing by global central banks and an ultra-low interest rate environment amid worries over the economic fallout from mounting COVID-19 cases have underpinned demand for bullion, helping it rise about 28% so far in 2020.
Gold is considered a hedge against inflation, and low interest rates reduce the opportunity cost of holding the metal.
Adding to the gloomy economic outlook, U.S. Federal Reserve policymakers warned U.S. growth would be muted until the coronavirus was contained.
“Gold continues to garner support from the pandemic as it continues to impact global economic growth and is dovish for central bank policy,” Phillip Futures’ analysts said in a note.
Investors are now waiting for a breakthrough in stalled U.S. stimulus negotiations while keeping a close watch on frayed U.S.-China ties ahead of key trade talks on Aug. 15.
Elsewhere, silver rose 0.8% to $25.76 per ounce, platinum gained 0.4% to $934.95 and palladium climbed 0.5% to $2,140.89.
