Gold Futures Jump on Bargain Hunting
Gold futures rebounded nearly 1% to Rs 1.44 lakh per 10 grams on Thursday, as traders engaged in value buying after the precious metal's recent price correction. A softer US dollar also provided support to the yellow metal, according to market analysts.
The most active gold contract on the Multi Commodity Exchange (MCX) for August delivery rose Rs 1,260, or 0.88%, to Rs 1,44,200 per 10 grams. The contract had fallen sharply in the previous sessions, prompting investors to buy at lower levels.
Weaker Dollar Lends Support
Meanwhile, the US dollar index slipped 0.2% against a basket of major currencies, making dollar-denominated gold cheaper for holders of other currencies. This weakness in the greenback added to the positive sentiment for gold.
Globally, spot gold in international markets edged higher by 0.6% to $2,650 per ounce, recovering from a two-week low. Analysts noted that the rebound was largely technical, with support at $2,600 an ounce holding firm.
Market Outlook
Traders are now awaiting US inflation data due later this week, which could influence the Federal Reserve's monetary policy stance. Higher interest rates typically weigh on gold, which offers no yield.
According to a PTI report, "Bargain hunting at lower levels lifted the precious metal after its recent correction, while a weaker US dollar also lent support to prices." The report added that gold had witnessed a sharp sell-off in recent days amid expectations of tighter monetary policy globally.
