Gold under pressure as global recession risk pushes up dollar Gold under pressure as global recession risk pushes up dollar
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Gold under pressure as global recession risk pushes up dollar

Gold under pressure as global recession risk pushes up dollar

Renewed strength in the greenback has now seen bullion tumble more than 20 per cent since a March peak

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Renewed strength in the greenback has now seen bullion tumble more than 20 per cent since a March peak.

Gold dipped to hold at a three-week low, as speculation the Federal Reserve will keep aggressively tightening monetary policy and potentially trigger a recession had investors again seeking shelter in the US dollar.

Renewed strength in the greenback has now seen bullion tumble more than 20 per cent since a March peak.

The non-yielding metal, which typically has a negative correlation with the dollar and rates, has been pressured by the stronger US currency.

On Wednesday, Minneapolis Fed President Neel Kashkari said the US central bank couldn’t pause its tightening campaign once its benchmark rate hits 4.5 per cent to 4.75 per cent if “underlying” inflation was still accelerating.

That led to a rally in the US dollar and higher bond yields.

Inflation woes go beyond the US, as shown on Wednesday by CPI gauges from Canada and the UK, which both came in higher than predicted.

Gold dipped 0.2 per cent to $1,626.95 an ounce at 8:01 a.m. in Singapore, after closing 1.4 per cent lower in the previous session. The Bloomberg Dollar Spot Index rose 0.1 per cent following a 0.6 per dent gain on Wednesday. Silver, platinum and palladium all declined.

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