Gold Prices Struggle Near Rs 1.47 Lakh Amid Dollar Strength and Rising Yields
Gold prices have been hovering around the Rs 1.47 lakh mark, but investors are finding it difficult to predict the next move. The precious metal is facing pressure from a firm dollar and high US bond yields, but safe-haven demand is offering some support.
The dollar's strength and rising Treasury yields make gold less attractive compared to interest-bearing assets, said Ponmudi R, CEO of Enrich Money. He added that the yellow metal is consolidating near recent lows due to these factors.
However, US inflation data gave gold a brief boost when it came in softer-than-expected, reducing expectations of an October rate hike by the Federal Reserve. This initially supported bullion prices, but the recovery did not last as rising oil prices, higher Treasury yields, and a stronger dollar offset the support.
Investors are advised to be prepared for continued consolidation and volatility rather than expecting gold to immediately resume a strong upward move. The next major trigger could be US economic data, particularly the September nonfarm payrolls report, which may influence expectations about the Federal Reserve's rate path and, in turn, gold prices.