NEW YORK: Gold prices rebounded from a 2-1/2-year low on Tuesday as a pause in the US dollar’s rally helped restore greenback-priced bullion’s allure, although risks from looming rate hikes persisted.

Spot gold was 0.7% higher at $1,632.59 per ounce by 12:03 p.m. EDT (1603 GMT), after rising over 1% to $1,642.29 earlier in the session.

US gold futures advanced 0.4% to $1,640.20.

“Today is just a little bit of a recovery after some of the extreme weakness seen over recent days ... but I don’t think there’s really any fundamental change taking place in the gold market,” said Ryan McKay, commodity strategist at TD Securities.

The dollar retreated from two-decade highs, prompting investors to turn to gold, which had fallen to its lowest since April 2020 at $1,620.20 in the previous session. A weaker dollar makes gold attractive for holders of other currencies.

Gold prices also benefited from “corrective price rebounds from recent selling pressure and on short covering from the shorter-term futures traders,” Jim Wyckoff, senior analyst at Kitco Metals, said in a note.