Gold recovers from 3-week low as dollar declines

Gold prices rose today, Tuesday, from the lowest level in three weeks, supported by a decline in the dollar, after an official US report showing that consumers expect low inflation raised hopes that the Federal Reserve (the US central bank) would reduce interest rates.

According to Reuters, gold rose in instant transactions by 0.2% to $2,032.73 per ounce by 0458 GMT, after recording on Monday its lowest level since December 18. US gold futures rose 0.3% to $2,038.90 an ounce.

A report by the Federal Reserve Bank of New York on Monday showed that consumers expect low inflation, and they also expect income and spending to decline in the coming years.

Low interest rates reduce the opportunity cost of holding non-yielding bullion

The dollar index fell one day after recording the largest daily decline in two weeks, which also supported the prices of the precious metal.

As for other precious metals, silver in spot transactions increased 0.1% to $23.11 per ounce, platinum jumped 0.3% to $948.42, and palladium rose 0.6% to $1,003.46.