Gold prices recovered by Rs 600 to reach Rs 1,56,800per 10 grams in the national capital on Monday, helped by a weaker US dollar and positive trends in overseas markets.
The precious metal of 99.9 per cent purity had settled at Rs 1,56,200 per 10 grams on Friday.
Silver prices, however, remained unchanged at Rs 2,40,000 per kilogram, inclusive of all taxes, for the second consecutive trading session, according to local traders.Saumil Gandhi, Senior Analyst–Commodities at HDFC Securities, said gold moved higher as the dollar weakened and expectations of aggressive interest-rate tightening by the US Federal Reserve eased.
Recent economic data from the US showed moderate inflation, weaker employment conditions and softer retail sales. These figures lowered expectations of further monetary policy tightening and kept pressure on the dollar.
A weaker dollar generally makes gold cheaper for buyers using other currencies, which can improve global demand for the precious metal.
Global Gains
Gold and silver also traded higher in international markets. Spot gold rose 0.48 per cent to $4,397.59 per ounce, while silver gained more than 1 per cent to $65.58 per ounce.
Praveen Singh, Head of Commodities at Mirae Asset ShareKhan, said gold was expected to maintain a positive trend because of dollar weakness and limited upside in crude oil prices.
Iran Concerns
Geopolitical developments also remained in focus. Singh said US President Donald Trump was preparing additional economic sanctions against Iran.
The US has already imposed around 2,200 sanctions on Iran since 2018. Reports of a continued blockade of Iranian ports also kept uncertainty high.
The 60-day ceasefire agreement between the US and Iran was set to expire on Monday, although its deadline had become less important following recent developments.
Jateen Trivedi, Vice-President and Research Analyst–Commodity and Currency at LKP Securities, said traders would closely track the US Federal Open Market Committee meeting minutes this week.
The minutes may provide fresh signals about the Federal Reserve's interest-rate plans and help determine the next direction for bullion prices.
