Gold continued to claw back losses after its recent drop, indicating that demand for the precious metal remains strong despite a risk-on mood in broader financial markets.

Bullion traded around $4,109 an ounce, having risen 0.3% in the previous session. Shares of the world’s largest tech companies rallied after Nvidia Corp.’s blockbuster outlook soothed fears of an artificial intelligence bubble. Gold has correlated with equities lately, particularly in the case of AI and technology stocks.

The strong positive correlation can be attributed to investors using hard assets like gold to hedge their AI investment, said Nicky Shiels, a strategist from MKS PAMP SA. “If investors are derisking from AI, they are going to reduce their hedge as well.”

Gold was up 0.8% at $4,109.12 an ounce as of 8

See Full Page