Mubasher: Gold prices went up on Tuesday, close to more than one-week high hit in the preceding session, as the dollar lost ground following soft US economic data, according to Reuters.
By 8:25 am GMT, spot gold climbed 0.33% to $1,301.74 per ounce, after reaching $1,303.61 per ounce, the highest level since 28 March, while US gold futures rose 0.27% to $1,305.40 per ounce.
“The US dollar is subdued and data shows that there is continued buying from central banks,” Australia and New Zealand (ANZ) bank analyst Daniel Hynes was quoted by Reuters.
This came at the time when the yellow metal reserves in China, the world’s biggest gold producer and consumer, rose 0.6% to 60.62 million ounces by the end of last March, according to data released by the People’s Bank of China (PBOC) on Monday.
Similarly, Turkey expanded its holdings of the precious metal last March, according to the International Monetary Fund (IMF).
The dollar sank after weak US economic data, making gold more affordable for non-US currency holders, recording its sharpest daily drop since 20 March in the prior session, the news agency said.
Belated figures released by the Commerce Department on Monday showed that orders for US-manufactured goods posted a modest decline last February, at the time manufacturing activity is losing momentum, while inventories climbed.
Moreover, US non-farm payroll data shed light on a slowdown in wage growth, as well as layoffs in factories, despite faster employment pace.
“Decline in wage inflation takes the pressure off the Fed and lets it remain dovish and delay rate hikes and maybe switch gears, and that’s supportive for gold,” DailyFX chief currency strategist Ilya Spivak was quoted by Reuters.
At 8:27 am GMT, the US dollar index, which measures the US currency against six major peers, edged down 0.09% to 96.9600.
It is worth noting that lower interest rates trim the opportunity cost of the non-yielding metal, while they pull the greenback down.
Investors are anticipating currently minutes of the Federal Open Market Committee’s March meeting due on Wednesday as well as the European Central Bank (ECB) meeting, according to Reuters.