Gold climbed after the US economy shrank for a second consecutive quarter, pushing the dollar and Treasury yields lower, and clouding the outlook for further aggressive interest-rate hikes as the Federal Reserve fights inflation.
Investors cut holdings in exchange-traded funds for silver, platinum and palladium in the second quarter on fears that a potential recession will reduce industrial demand, but gold assets held up because of its role as a haven, and that may persist.
Gold may be heading for another rally, with warnings over a global economic slowdown paving the way for a fresh push toward $2,000 an ounce.
Gold fell from near a 19-month high as risk sentiment improved, despite ongoing concerns that the fallout from Russia’s invasion of Ukraine will further fuel inflation and hurt economies.
Gold surged to the highest since 2020 after Russian forces attacked targets across Ukraine, triggering the worst security crisis in Europe since World War II and crushing risk sentiment.
European shares and U.S. equity futures declined on Thursday amid the souring mood in the stock market. The greenback snapped three days of declines as investors sought a haven, putting pressure on gold and metals priced in the currency.