Gold has recuperated from its four week low on Thursday as investors took advantage of lower prices and the U.S.placed new sanctions on Russia. These sanctions are the toughest ever imposed on Russia and have weighed heavy on stock markets.
Many have also attributed the rebound in prices to bargain hunting.
Robin Bhar, an analyst at Societe Generale SA in London, said, "The new sanctions on Russia are raising some of the geopolitical tensions a notch. There's a bit of bargain hunting, considering the steep fall over the last few days. We're still in an overall downtrend, depending on the Fed's timing of rate hikes and exiting of quantitative easing," according to Bloomberg,
According to Reuters, Spot gold was up 0.2% at $1302.10 an ounce at 1449 GMT while U.S. gold futures for August increased by $3 an ounce at $1302.80.
However, the U.S. monetary policy is expected to intensify its limits. During the first two days of this week, Spot prices decreased over 3 percent at $1302.80, which is its lowest since mid-June at $1302.80.
Many trades are still chewing over Federal Reserve Chair Janet Yellen's statement on Tuesday, reporting that higher rates are possible earlier and faster if hiring and wages unexpectedly take off. Investors in gold are expected to withdraw money if these higher rates take effect, reports Reuters.
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