Gold rebounds after trading lower on profit taking

Gold prices rose on Thursday, supported by a weaker dollar and economic concerns, as investors sought more clarity on the path of the Federal Reserve’s monetary policy.

And by 0131 GMT, gold in instant transactions rose 0.2 percent to $ 2032.58 an ounce. US gold futures also rose 0.2 percent to $2,041.80.

The dollar index fell 0.1 percent, making the yellow metal priced in the greenback accessible to buyers abroad.

Gold prices initially rose on Wednesday after the release of US inflation data, before turning lower on profit taking.

The annual increase in consumer prices in the United States slowed to less than five percent in April for the first time in two years, which could be a reason for the US central bank to pause interest rate hikes next month.

Low interest rates enhance the attractiveness of non-yielding gold.

Meanwhile, US President Joe Biden ramped up pressure on Republican lawmakers on Wednesday to move quickly to raise the country’s $31.4 trillion debt ceiling or risk the world’s largest economy sliding into recession.

As for other precious metals, spot silver fell 0.2 percent to $25.37 an ounce, platinum rose 0.2 percent to $1,115.92, while palladium lost 0.2 percent, recording $1,604.23.