Gold Price Today: Gold prices edged lower on Monday (August 10) after hitting a more than seven-week high in the previous session, as a stronger US dollar made the precious metal less attractive to foreign buyers.
As of 6:05 am, spot gold was down 0.2 per cent, or USD 6.30, at USD 4,335.24 per ounce. Gold prices had crossed the USD 4,300 mark in the previous session, touching their highest level in more than seven weeks. Spot silver was trading largely flat, hovering above the USD 63-per-ounce mark.
In the domestic market, spot gold and silver prices were not available at the time of writing. On the Multi Commodity Exchange (MCX), gold futures settled at Rs 1,51,985 per 10 grams, while silver futures settled at Rs 2,31,804 per kg.
US dollar strength weighs on gold prices
Adding pressure on bullion, the US dollar index, which tracks the greenback against six major currencies, was up more than 0.1 per cent at 99.65. The dollar gained amid heightened uncertainty surrounding the US-Iran situation, triggering safe-haven demand for the currency.
The US dollar is considered a safe-haven asset as investors tend to buy it during periods of economic uncertainty and market volatility. A stronger dollar typically weighs on gold prices because it makes the dollar-denominated metal more expensive for holders of other currencies.
On the geopolitical front, US President Donald Trump said Washington was adopting a “low-key” approach towards Iran and was not currently looking to launch a fresh military offensive.
Oil prices, US inflation data in focus
The geopolitical uncertainty also supported crude oil prices on Monday, with oil futures rising more than 2 per cent. Brent crude futures were trading above USD 84 a barrel, while WTI crude futures were up 0.8 per cent at USD 78.79.
Rising crude oil prices can fuel inflation concerns, which may weigh on gold when higher inflation expectations raise the prospect of higher interest rates and stronger bond yields.
However, gold prices gained in the previous session after weaker-than-expected US jobs data strengthened expectations of a potential slowdown in the labour market.
US nonfarm payrolls fell by 23,000 jobs last month after a downwardly revised increase of 20,000 in June, according to data from the US Labor Department’s Bureau of Labor Statistics. Economists polled by Reuters had expected payrolls to increase by 80,000.
US CPI, PPI data to guide gold prices
Investors will now focus on key US inflation data due this week, including the Consumer Price Index (CPI) and Producer Price Index (PPI). The data could provide fresh clues on the US Federal Reserve’s interest-rate outlook and determine the near-term trajectory of gold prices.
A softer inflation reading could support expectations of lower interest rates, potentially benefiting gold, while stronger-than-expected inflation could push bond yields and the US dollar higher, creating pressure on the yellow metal.
(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.)
