Gold Price Rises Amid Weaker Dollar and Escalating Middle East Tensions
The gold price rose by 0.78% to ₹153,763 as investors assessed renewed inflation risks from escalating Middle East tensions and awaited key US inflation data for further clues on the Federal Reserve's policy outlook.
A weaker US dollar contributed to the increase in gold demand, with the dollar slipping to a four-month low. Markets are currently pricing around a 60% chance of a Fed rate hike next week.
The intensifying US-Iran tensions pushed oil prices to their highest level in over three months, while the People's Bank of China extended its gold-buying streak to 22 consecutive months, raising holdings to 76.73 million fine troy ounces from 76.08 million ounces at end-July.
Indian gold demand improved as lower prices encouraged buying, with Indian dealers quoting discounts of up to $54 per ounce, narrowing sharply from $135 last week.