PRECIOUS-Gold bounces back above $1,100/oz from 5-year low – by Jan Harvey (Reuters U.S. – July 23, 2015)

http://www.reuters.com/

LONDON, July 23 (Reuters) – Gold bounced back above $1,100 an ounce on Thursday from the previous session’s five-year low, as a retreat in the dollar prompted some investors to take advantage of the price drop to buy back into the market.

Many remained wary towards the precious metal, however, after it posted its deepest one-day loss in nearly two years on Monday, pushing prices through key chart levels and setting it up for further weakness.

Gold has been undermined this year by expectations that the Federal Reserve is on track to raise interest rates for the first time in nearly a decade, boosting the cost of holding non-yielding bullion and lifting the dollar.

Spot gold was up 0.8 percent at $1,101.25 an ounce at 1152 GMT, while U.S. gold futures for August delivery were up $9.10 an ounce at $1,100.60.

“Gold is falling out of favour as the Fed is preparing to increase borrowing costs,” AvaTrade’s chief market analyst Naeem Aslam said.“This will remain the major hurdle for any upside move for the precious metal and traders will likely be selling into these rallies.”

“The bounce in gold is nothing but a technical trade, as most major momentum indicators are showing that the recent sell-off is overdone.”

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