Gold prices rose on Thursday due to growing concern surrounding Delta variant of Covid-19 boosting appeal for the precious metal.
Spot gold was up 0.39 per cent at $1,775.13 per ounce at 9.15am UAE time. Precious metal prices increased in Dubai also on Thursday morning in line with the global rates.
In Dubai, 24K price bounced back by almost two dirhams on Thursday morning. The Dubai Gold and Jewellery Group data showed 24K trading at Dh215.0 per gram, 22K at Dh202.0, 21K at Dh192.75 and 18K at Dh165.25.
While the market is concerned about rate hikes going into the non-farm payrolls data, the spread of the Delta variant globally is supporting gold prices, said Stephen Innes, managing partner at SPI Asset Management.
But “it is going to be quiet unless we do get a decisive break on either side of $1,775 or $1,750 levels,” he added.
The spread of the Delta variant of Covid-19 has prompted France to delay the easing of restrictions in the Landes region, while coronavirus infections have surged in Asia.
Investors are now awaiting the US non-farm payrolls report on Friday for clues on the Fed’s next step.
Data released on Wednesday showed US private payrolls increased more than expected in June as companies rushed to boost production and services amid a rapidly reopening economy.
Federal Reserve Bank of Dallas President Robert Kaplan said Wednesday he would like the Fed to start reducing its support for the economy before the end of the year, in part to make an abrupt policy tightening less likely later on.
A Fed rate hike will increase the opportunity cost of holding bullion, dulling its appeal.
(Within inputs from Reuters)
However, lower crude prices in the international market and fresh foreign fund inflows restrict the rupee’s fall, forex dealers say
The dollar index, which gauges the greenback's strength against six currencies, fell 0.41 per cent to 105.63, post weak US data and dovish Fed minutes
San Francisco Fed President Mary Daly said the real-world impact of US interest rate hikes is likely greater than what its short-term rate target implies
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.24 per cent to 107.57