New Delhi -°C
Today in New Delhi, India

Aug 11, 2020-Tuesday
-°C

Humidity
-

Wind
-

Select Country
Select city
ADVERTISEMENT
Home / Business News / Gold eyes best month since January 2012 as weak US data dents dollar

Gold eyes best month since January 2012 as weak US data dents dollar

The US dollar fell to a two-year low and was on course for its worst month in a decade, making bullion cheaper for investors holding other currencies.

business Updated: Jul 31, 2020 14:50 IST
Reuters | Posted by Kanishka Sarkar
Reuters | Posted by Kanishka Sarkar
A salesman displays gold bars inside a jewellery shop in Hyderabad.
A salesman displays gold bars inside a jewellery shop in Hyderabad. (Reuters File Photo)

Gold rose on Friday en route to its best month in 8-1/2 years as the dollar slid further after dismal US data added to doubts about a swift recovery from the pandemic-induced economic slump, driving investors towards the safe-haven metal.

Spot gold was up 0.8% at $1,975.44 per ounce by 0651 GMT after snapping a nine-session winning streak on Thursday. US gold futures rose 1.5% to $1,970.70.

The US dollar fell to a two-year low and was on course for its worst month in a decade, making bullion cheaper for investors holding other currencies.

Apart from US data showing the deepest economic contraction in at least 73 years in the second quarter, and a rise in unemployment benefits, the dollar was also hurt as President Donald Trump raised the idea of delaying the November 3 presidential election.

“The weak Q2 GDP also underscores the point of a weak economy, and investors seeking refuge in gold,” said National Australia Bank economist John Sharma.

A deterioration in the coronavirus situation, escalation in geopolitical tensions and further declines in the dollar could push gold above the $2,000 level, he added.

Gold has risen nearly 11% so far this month, its biggest monthly percentage gain since January 2012, having soared to an all-time high of $1,980.57 on Tuesday.

The jump took gains for the year to nearly 30%, driven by a worsening pandemic and low interest rates globally amid widespread stimulus from central banks since the metal is considered a refuge against inflation and currency debasement.

“However, further gains are reliant on investor demand, with consumer demand showing no signs of recovery,” ANZ analysts said in a note.

Among other metals, silver climbed 2.6% to $24.16 an ounce, on course for its best month on record - up over 30%, with additional support coming from hopes for a revival in industrial activity.

Platinum rose 0.8% to $909.98 and palladium gained 0.7% to $2,096.84.

ht epaper

Sign In to continue reading