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Johannesburg – The rand was on firmer ground against the dollar in early on Monday trade, but analysts warned that a bomb attack in Turkey could sap emerging market risk appetite.

The government bonds eased slightly while the Top 40 futures index on the JSE exchange dipped 0.12percent, pointing to a flat start for the bourse at 09:00.

At 08:48 the rand traded up 0.41percent at R13.3050/$ compared with where it ended Friday’s session in New York.

The rand has clawed back significant ground over the last two weeks since hitting a record low of 14.1600 on September 29.

he local currency’s recovery has largely been aided by investors moving back into high-yielding emerging markets as a US interest rate hike in 2015 looks increasingly unlikely.

“A weekly close below $13.1700/R could see a deeper correction to 12.95 and even 12.70,” Standard Bank trader Warrick Butler said.

But a suicide bombing in Turkey, which put pressure on the rand’s emerging market peer the lira on Monday, could be the rand’s undoing.

“Already this morning the lira has suffered from risk aversion losing well over 1percent against the dollar from Friday’s close. This could plague the rand,” Butler said.

Yields inched up across the curve, with the 2026 secondary market benchmark note maturing in 2026 adding 1 basis point to 8.19%.

Meanwhile, gold advanced to the highest in seven weeks while most precious metals gained as doubts over a possible increase in US interest rates this year rose and investors turned the least confident since 2014 that the dollar will strengthen.

Spot bullion climbed as much as 1.1% to $1 168.95 an ounce, the highest since August 24, and was at $1 166.87 by 14:06, Bloomberg generic pricing shows. Prices were up 1.6% last week. Silver advanced 0.8% while platinum gained 0.5%.

Gold’s climbed for three of the past four weeks, rebounding from a five-year low in July, amid speculation that the Fed may refrain from tightening until next year. The chances of a rate liftoff in 2015 are below 40%, futures data show.

While Fed Vice chairperson Stanley Fischer said on Sunday the US economy may be strong enough to merit an increase by year-end, dollar investors shrugged off his comments as a gauge of the US currency touched a three-week low.

“You have the lower interest rates and you have the dollar story,” Georgette Boele, a strategist at ABN Amro Bank NV in Amsterdam, said by phone. “They have a double impact because lower interest rates are usually supportive for precious metals and at the same time the weaker dollar is as well.”

Minutes from the Fed’s meeting in September released Thursday revealed that policy makers were divided, which means they are unlikely to raise rates this year, according to Barclays.— News24.