Gold rises as economic fears return to the spotlight

Gold rose on Wednesday as renewed recession fears bolstered bullion’s safe-haven appeal and offset pressure from a firmer dollar, as investors awaited monetary policy signals from the Federal Reserve.

Spot gold rose 0.4% to $1,839.86 an ounce by 11:45 GMT, reversing its initial decline, while US gold futures gained 0.2% to US $1,841.70.

Global stocks fell on concerns about rising interest rates and a possible recession.

In addition, rising food prices pushed UK consumer price inflation to 9.1% last month, its highest level in 40 years.

“The fear of rising risks of recession and inflation is a good backdrop in terms of safe-haven demand; It’s not like everyone is rushing into gold, but people are clearly holding their ground at the moment.”Julius Baer’s Carsten Menke said. “But on the downside, we have this very aggressive monetary tightening, especially by the Fed.”.

Capping gold’s gains, the dollar index rose 0.1%, making bullion more expensive for foreign buyers.

Powell is scheduled to testify before Congress on Wednesday and Thursday, after the central bank raised its benchmark interest rate by 75 basis points (bps) last week to try to curb inflation.

In other precious metals, silver fell 0.9% to $21.47 an ounce; platinum was down 0.2% at $935.75; and palladium rose 0.4% to $1,884.34.