The prices of gold rose to a three-month high in the global market.
Mumbai: Growing concerns regarding US President Donald Trump’s policies and political risks from elections in some of the Eurozone countries have helped gold regain its appeal as a safe haven asset. The prices of gold rose to a three-month high in the global market and the positive momentum is expected to gather further pace in the coming days.
On the domestic side, bullion experts said the prices of gold is unlikely to see a major upside in tandem with international prices as the Indian rupee has started rallying higher against the US dollar. The prospects of a strengthening dollar in the wake of expected rise in interest rates in the US took away some sheen from gold in recent months. However, the latest data in U.S. showing a slowdown in wage growth despite a pick up in fresh hiring resulted in the dollar giving up some of its recent gains.
“Uncertainty about Mr Trump’s fiscal stimulus policies and his administration’s spat with traditional allies helped push hedge funds bullish bets on gold to the most in almost two months. The value of the US dollar against a basket of currencies has fallen nearly 4 per cent since January 3. This was partly on expectation that the US central bank would wait to see what happens on the political and economic fronts especially after last Friday’s monthly jobs report data, which showed that wages barely rose,” said Prithviraj Kothari, director, RiddiSiddi Bullion. Moreover, bullion participants are also watching the political developments in France, Germany, and the Netherlands.