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It’s still early, but gold’s inflation-hedging mode — virtually absent for months — might be creeping back.

For a second straight day, both futures and spot prices of the yellow metal defied a stronger dollar to come off their lows.

The gain on the day itself was just over a half percent while the intraday peaks remained below the mid-$1,750 level that gold needed to cross in order to reach its next most-important berth: $1,800.

Yet, it was a sign that the rut that wiped nearly 10% off the yellow metal since the start of the year has stopped, for now.

Gold for April delivery settled at $1,729.20, up $9.40, or nearly 0.6% on New York’s Comex.

On Friday, the benchmark gold futures contract settled down at $1,719.80, recovering from a session low of $1,696.65 forced by a stronger dollar.

The spot price of gold, which fund managers sometimes rely on for direction more than futures, was at $1,731.82 by 4:00 PM ET (20:00 GMT). It hit an intraday low of $1,721.74 earlier.

Monday’s rebound came ahead of the Federal Reserve’s Tuesday-Wednesday monthly meetings for March, and before the central bank’s chairman Jay Powell holds his all-important post-meeting news conference.

The Fed’s policy statement itself is expected to leave U.S. interest rates unchanged again, at near zero, as it has over the past year since the outbreak of the coronavirus pandemic.

But expectations are also high that Powell will express some concern at least over this year’s stunning selloff in Treasury markets, which has consistently led the yield on the 10-year Treasury note to hit pre-pandemic highs above 1.6% over the past month, the latest being on Friday.

The surging bond yields have been an anathema, forcing the yellow metal to lose 17% from record highs of nearly $2,100 in August. Any indications by the Fed that it will intensify bond buying in the coming months could just be the thing to clamp down on surging yields and spark a rally in gold.

For decades, gold was touted as the best store of value whenever there were worries about inflation. Yet, in recent months, it was deliberately prevented from being the go-to asset for investors as Wall Street banks, hedge funds and other actors shorted the metal while pushing up U.S. bond yields and the dollar instead.

Bond yields have surged on the argument that economic recovery in the coming months could extend beyond Fed expectations, leading to spiraling inflation, as the central bank insists on keeping interest rates at near zero.

The dollar, which typically falls in an environment of heightened inflation fears, also rallied instead on the same runaway economic recovery logic. The greenback’s status as a reserve currency has bolstered its standing as a safe haven, leading to new long positions being built in the dollar. In recent weeks, the Dollar Index has returned near the key bullish level of 92, further weighing on gold.

“Gold’s performance, and the resilience of non-tech stocks, hints that maybe markets are starting to get more comfortable with the prospects of higher inflation, and some degree of resulting adjustment in the costs of capital,” Jeffrey Halley, senior markets analyst for Asia Pacific at OANDA, said in a note on Monday.

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