Gold Prices Approach 16-Month Low Before Rebounding to $1,700

During the "Fed-vacuum" week, gold had a larger-than-expected price movement, although it was a decrease rather than a rise.

On January 31, gold futures for August delivery on New York's Comex reached a low of $1,676.80, less than a week before the central bank's announcement about a rate hike in July. It ended the day at $1713.20, an increase of 13.2 points, or 0.8%.

According to dealers, the spot price of bullion, which more precisely represents gold's pricing and demand dynamics than Comex futures, touched a 16-month low of $1,680.96.

Gold bulls have been unable to push the market far higher from its 11-month low of $1,695 on Comex last week, despite Fed officials respecting the customary 10-day speech prohibition before the rate decision on July 27.

The restart of gold's drop on Thursday could not be traced to a single cause. The dollar, which often influences the direction of gold by moving in the opposite way, also sank as the European Central Bank joined other central banks in raising interest rates to battle inflation rather than to prevent a recession.

On Thursday, the Dollar Index, which measures the dollar to six other currencies, hovered below 107 after topping 109 for the first time since December 2002 due to anticipation of rapid Federal Reserve rate hikes.

Others, though, saw the recovery to $1,700 as proof of gold's endurance.

Craig Erlam, an analyst at the online trading platform OANDA, said, "This session has been highly volatile, and gold seems to have recovered in popularity." "The shift may be caused by a hawkish ECB, but the gain in gold much surpasses the decrease in the dollar. We seem to be seeing the inverse of the price movement from late last week. Is the market for gold recovery active?"