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1 month ago
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Highlights
- Gold jumps on weaker dollar
- MCX gold settles at Rs 1.41 lakh/10g
- US jobs data, Fed outlook in focus
Gold Price Today: Gold prices rose on Monday (August 3), supported by a weaker US dollar, which made the precious metal cheaper for overseas buyers and increased its appeal as a safe-haven asset.
As of 5:44 am IST, spot gold was up 0.6 per cent or USD 25 at USD 4,066.28 per ounce. Spot silver also gained 0.5 per cent, rising USD 0.31 to trade near USD 58 per ounce.
Meanwhile, gold and silver were not trading on the Multi Commodity Exchange (MCX) at the time of writing. In the previous session, MCX gold futures settled at Rs 1,41,599 per 10 grams, while silver futures ended at Rs 2,17,488 per kg.
Weaker US dollar supports gold
The US dollar index, which measures the greenback against a basket of six major currencies, was down 0.3 per cent at 99.60.
A weaker dollar typically supports precious metals by making them more affordable for holders of other currencies. It also enhances gold's attractiveness as an alternative store of value.
Geopolitical uncertainty adds to safe-haven demand
Gold also drew support from geopolitical developments after US President Donald Trump said talks with Iran would take place on Monday but stopped short of setting a deadline for reaching an agreement.
The comments came as crude oil prices retreated sharply. Brent crude futures were down more than 7 per cent at USD 83.74 per barrel, while WTI crude fell around 5 per cent to USD 80.45 per barrel.
Lower oil prices ease inflation concerns
The decline in crude oil prices eased inflationary pressures, reducing expectations of aggressive interest rate increases. Lower inflation expectations tend to benefit non-yielding assets such as gold, as they reduce the opportunity cost of holding bullion.
Fed rate expectations remain in focus
Markets are currently pricing in around a 65 per cent probability of a Federal Reserve rate hike at the September FOMC meeting. However, those expectations have eased from nearly 80 per cent seen a few days ago.
Any further shift in interest rate expectations is likely to influence the direction of gold prices in the near term.
Key US economic data this week
Investors will now closely monitor a series of US economic releases this week for fresh clues on the Federal Reserve's policy path. The key data points include:
- US Job Openings (JOLTS)
- Initial Jobless Claims
- US Nonfarm Payrolls and Employment Report
Stronger-than-expected labour market data could reinforce expectations of tighter monetary policy, while softer readings may provide further support to gold prices.
(Disclaimer: The above article is meant for informational purposes only and should not be construed as investment advice. ET NOW DIGITAL advises its readers to consult their financial advisors before making any investment decisions.)
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