In global markets, gold prices moved higher today as lacklustre US employment data and surging covid cases boosted the safe-haven appeal of gold. Spot gold climbed 0.4% to $1,951.13 per ounce.
Silver and gold prices ticked higher in Indian markets as the precious metals continue to trade in a narrow range. On MCX, gold futures rose 0.2% to ₹51,571 per 10 gram while silver futures gained 0.4% to ₹68,405 per kg. In the previous session, gold futures had declined 0.7% while silver had tumbled 0.8%. Gold has remained directionless over the last three weeks after hitting a record high of ₹56,200 on August 7.
A weaker US dollar also supported gold. The dollar index was down 0.1% against its rivals, making gold more attractive for buyers holding other currencies.
Among other precious metals, silver fell 0.5% to $26.97 per ounce while platinum dipped 0.4% to $936.
The weekly jobless claims report in US showed that nearly 30 million people were on unemployment benefits at the end of August. This increased expectations that more stimulus will be rolled by governments and central banks to prop up the economies.
Lower US interest rates tend to weigh on bond yields and the dollar. This increases the appeal of non-yielding gold, which is also seen as a hedge against inflation and currency debasement.
The US Fed on Wednesday had kept interest rate unchanged as expected and maintained an uncertain outlook for the economy and reaffirmed that interest rate may remain low for a long time but did not discuss any fresh measures and reemphasized on need for additional fiscal stimulus.
Lack of any fresh cues from Fed and downbeat outlook for US economy however led to choppiness in equity markets and this lent some support to gold price, said Kotak Securities.
Mixed US economic data also points towards uneven economic recovery.
“Meanwhile, ETF investors moved to sidelines awaiting more clarity on price direction. Gold holdings with SPDR ETF, the world’s biggest gold-backed exchange traded fund, were unchanged at 1247.569 tonnes. Fed’s cautious tone on economy and commitment to keep interest rate low is generally positive for gold hence we maintain a buy on dips view,” the brokerage added.
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