The gold price has risen well above $1,120 per troy ounce this morning and is therefore nearing the 3½-week high it achieved last week. Gold had come under pressure for a time yesterday, dipping briefly to $1,110. The rapid price recovery shows that lower prices generate buying interest and cause the selling pressure among speculators to abate.



"Gold currently appears to be in a bottoming out phase which could well continue for some weeks yet before any more sustained price recovery can be expected. The uncertainty as to when the first Fed interest rate hike might happen is currently arguing against significantly higher prices", says Commerzbank in a report on Wednesday.



At the moment, the Fed Fund Futures regard the probability of a rate hike in September as being less than 50%. The minutes of the latest Fed meeting, due to be published this evening, may change this assessment. If the market prices in a higher probability as a result, the gold price could come under renewed pressure, though the kind of sharp price fall seen in July is no longer likely given the now better market sentiment and buying which would then be expected, adds Commerzbank.