(Bloomberg) — Gold climbed higher amid investor buying following the biggest weekly loss in 15 months.
Prices slumped to the lowest since April after policy makers at the Federal Reserve brought forward their expectations for when monetary tightening would start. That saw exchange-traded funds add the most gold in three months on Friday, according to an initial tally by Bloomberg, a sign some investors saw bullion’s decline as a buying opportunity.
“Gold may be temporarily oversold and some investors are taking this opportunity to buy the dips,” said Margaret Yang, a strategist at DailyFX. “However, prices may be vulnerable to further pullback if the Fed signals a firm stance on tapering.”
Read more: U.S. 30-Year Yield Drops Below 2% for First Time Since February
The focus will now turn to speeches by Fed officials for more clues on the direction of monetary policy. Chair Jerome Powell is due to testify on Tuesday at a House Subcommittee hearing on the Fed’s pandemic emergency lending and its asset purchase programs.
St. Louis Fed President James Bullard said Friday that inflation risks may warrant the U.S. central bank beginning raising interest rates next year. That stands in contrast to Powell, who earlier cautioned that discussions about raising interest rates would be “highly premature.”
Spot gold rose 0.7% to $1,777.04 an ounce at 8:53 a.m. in London. Prices fell 6% last week, the most since March 2020. Silver and palladium rose, while platinum dropped. The Bloomberg Dollar Spot Index was little changed after rising 2% last week.
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