Gold strives to recover from 4-months low as strong dollar curbs gains

Gold prices rose on the European market on Thursday, in attempts to recover from a four-month low recorded earlier in the Asian market, while gains held by the dollar's rally against a basket of global currencies.

As of 09:35 GMT, Gold prices rose by 0.2% to trade at $1,276.22 an ounce from the opening level of $1,273.64, with the highest level at $1,277.65 and a low of $1,271.22, the lowest since the 27th of December.

Yesterday, gold prices lost 0.3%, the fifth daily loss in a row, among the longest daily losses this year, as demand for safe haven assets slowed.

Other than its rebounds from the four-month low, gold prices are currently supported by the recovery of demand levels for the metal as a safe haven, especially after weak data in Europe on the manufacturing sector during April, as it boosted signs of a sharp decline in the European economic growth.

The dollar index rose 0.35% on Thursday, hitting a two-week high of 96.99 points, reflecting the acceleration of the US currency's purchases against a basket of global currencies, especially against the Euro, This puts pressure on gold prices as it is dollar-denominated which makes its value rises for holders of other currencies.

The rise in the US dollar comes ahead of the release of important US data of March's retail sales, which provides strong evidence of the pace of growth of the world's largest economy in the first quarter of this year.

Gold holdings on the SPDR Gold Trust Fund The world's (largest gold-backed fund) rose yesterday by 0.59 metric tons, in the first daily gain since the 26th of March, bringing the total to 752.86 metric tons.