Gold Price Today, September 2: Gold prices traded largely flat on Wednesday after falling to a two-week low in the previous session, as a stronger US dollar and elevated Treasury yields weighed on bullion, while rising crude oil prices added to inflation concerns amid escalating tensions in the Middle East.
As of 5:50 am IST, spot gold was nearly unchanged at USD 4,327.13 per ounce, after falling around 3 per cent in the previous session. Spot silver, meanwhile, edged 0.3 per cent higher to trade at USD 64.26 per ounce.
In the domestic market, gold and silver futures on the Multi Commodity Exchange (MCX) settled at Rs 1,51,699 per 10 grams and Rs 2,28,993 per kg, respectively, in the previous session.
Gold price today: Strong US dollar weighs on bullion
The US dollar index, which measures the greenback against a basket of six major currencies, remained firm and was heading back towards the 100 mark.
A stronger US dollar typically puts pressure on gold prices as it makes dollar-denominated bullion more expensive for holders of other currencies, potentially reducing demand.
Meanwhile, the US 10-year Treasury yield was up around 0.2% at 4.806%. Higher US Treasury yields increase the opportunity cost of holding non-yielding assets such as gold, thereby weighing on investor demand for bullion.
Middle East tensions, crude oil prices in focus
Geopolitical developments in the Middle East also remained in focus. Iran’s Islamic Revolutionary Guard Corps (IRGC) claimed that it had launched a heavy ballistic missile attack on Prince Hassan airbase and a US Marine base in Jordan, in response to earlier US strikes that reportedly killed civilians.
Amid heightened tensions in the region, crude oil prices moved higher. Brent crude futures rose around 0.5 per cent to trade close to USD 96 a barrel, while WTI crude futures gained more than 1 per cent to USD 91.23 a barrel.
Higher crude oil prices can add to inflationary pressures and strengthen expectations that interest rates could remain elevated for longer. This can increase the opportunity cost of holding non-yielding gold and weigh on bullion prices.
Market participants are also assessing the outlook for US interest rates. According to the CME FedWatch Tool, the probability of a Federal Reserve rate hike at the September FOMC meeting stood at around 67 per cent.
Gold price outlook: US jobs data in focus
Attention will now turn to key US jobs data due later this week, which could provide fresh clues about the health of the world’s largest economy and influence expectations for the Federal Reserve’s monetary policy path.
For gold investors, the direction of the US dollar, Treasury yields, crude oil prices and expectations for Fed policy are likely to remain key drivers of bullion prices in the near term.
