The rise in the price of gold comes amid a weak US dollar and slowing US Treasury yields. Analysts say investors are seeking refuge in the safe-haven metal amid concerns over a global economic slowdown.
“MCX gold prices are likely to trade with a positive bias and rise towards the Rs 57,200 level over the coming trading sessions,” ICICI Direct said.
At its next policy meeting, the Fed is expected to raise rates by 25 basis points, after slowing the pace to 50 basis points in December after four straight increases of 75 basis points.
Lower interest rates tend to benefit bullion, lowering the opportunity cost of holding the non-performing asset.
The dollar index fell 0.2%. A weaker greenback makes dollar-priced bullion more affordable for many buyers.
Traders will focus on a slew of US economic data this week ahead of the February 1 FOMC meeting. Eurozone, UK and US PMIs will be the main focus today, followed by the fourth quarter US GDP report on Thursday.
In the international bullion market, the spot price of gold rose 0.2% to $1,935.69 per ounce.
“Gold could consolidate here as the bond market likely won’t rally until we get some major US GDP or core PCE data later this week. the Fed continue to grow as recession outcomes look more likely,” market analyst Edward Moya said. from OANDA.
Back home, the Indian government is expected to lower import duties on gold, which could boost retail sales by making the metal cheaper ahead of the peak demand season in the world’s second largest consumer of bullion, according to a recent Reuters report.
(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
