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Gold gained some ground on Monday as a stall in the dollar’s rally helped bulls partially recoup their losses from the yellow metal’s recent plunge.

Front-month gold futures on New York’s Comex settled at $1,782.90, up $13.90 or 0.8%. Comex gold lost $110, or 5.9%, last week for the biggest drop of its kind since the week ended March 6, 2020. The loss came after a seven-week low of $1,768 set for the benchmark gold futures contract.

The spot price of gold was at $1,783.13 by 3:34 PM ET (19:34 GMT), up $18.80, or 1.1%. The spot price lost $113, or 6%, last week, also the biggest weekly decline since the week to March 6, 2020. The loss came after a seven-week low of $1,765.91 for spot gold.

Traders and fund managers sometimes decide on the direction for gold by looking at the spot price — which reflects bullion for prompt delivery — instead of futures.

Gold regained some ground as the Dollar Index slowed its advance, retreating by 0.4% to 91.85 after last week’s climb to 92.4.

“Gold prices are attempting to stabilize after last week’s bloodbath,” said Ed Moya, analyst at online trading platform OANDA.

“Wall Street is starting to expect a lot less stimulus getting pumped into the economy and that has been kryptonite for gold. The Fed’s upgraded forecasts was mostly them playing catchup with their forecasts and the surge with yields at the shorter end of the curve was warranted.”

The dollar’s advance paused after two senior Federal Reserve bankers suggested that the Fed could wait with a rate hike until 2023 but not its stimulus tapering.

“The Fed will need to be ready to make changes to tapering,” St. Louis Fed President James Bullard said, referring to the shifts required to the central bank’s monthly purchase of $80 billion in Treasury bonds and $40 billion in mortgage-backed securities. “If you wait too long to taper and your imbalances worsen, you may find yourself needing to take extra steps down the line.”

Dallas Fed President Robert Kaplan, meanwhile, said Monday that he anticipated 2021 inflation to be at 3.4%, above the current rate of 2.4% predicted by the bank for all of this year.

The need for stimulus tapering and when such an exercise might actually begin has become one of the most hotly debated issues in the U.S. as inflation overshoots the Fed’s expectations amid the economy’s rapid recovery from the pandemic. The central bank said during its June policy meeting last week that it was studying for an appropriate exit for its stimulus program, while setting the first post-pandemic U.S. rate hike at the end of 2023.

The U.S. economy shrank by 3.5% in 2020 due to lockdowns imposed by the COVID-19. Since the start of this year, growth has exceeded expectations, with a first quarter expansion of 6.4%. The Fed has officially forecast a 6.5% growth for all of 2022, with some of its more optimistic bankers projecting a 7% expansion.

The Fed’s problem, however, is inflation as prices of almost everything have soared from the lows of the pandemic.

The Fed acknowledges price pressures arising from bottlenecks in U.S. supply chains. But some of the central bank’s top officials, led by Chairman Jerome Powell, also say the current inflation is “transitory” and will fade as the economy makes a full recovery from the COVID-19.

“Gold will eventually return to becoming both an inflation hedge and safe-haven asset, but for now it trades solely as a risky asset,” said Moya of OANDA. “Something will break gold’s way over the short-term, either stocks start to feel the rumblings of a sooner-than-expected taper tantrum or the dollar’s rebound is temporary.”

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