Prices of gold futures traded slightly higher near $1,200 on Wednesday, as market participants sought ahead of the release of key US data later in the session, which is added to speculation that the Federal Reserve will not be elevated interest rates soon.
On the Comex, gold futures for June delivery quoted up $1.90, or 0.16%, to trade at $1,195.10 a troy ounce. While, Spot gold was steady at $1,193.86 an ounce before a session high of $1,199.60 on Tuesday.
The Commerce Department said on Tuesday, the US trade gap increased 43.1 percent to $ 51.4 billion in March, the highest since Oct 2008. Other data showing activity in the services sector quickened to a maximum of five months in April.
The trade data spooked the markets, thus increasing safe-haven bids for gold.
Investors were looking past ADP report on employment growth in the private sector for April later in the day as well as an address by President of the Federal Reserve Janet Yellen, it would be followed closely for any indication about the moment of the first rise in interest rates.
The operators were also awaiting Friday US non-farm payrolls report for more clues about when the Fed might raise interest rates.
The US trade deficit was significantly higher to the provisions in the initial government estimate of first-quarter growth last week, fueling fears that the US economy may have acquired over the first three months of the year.
To a recent dismal run economic data dampened optimism about the recovery, which fueled speculation that the Fed may delay hiking interest rates until the end of 2015, instead of midyear tighten.
The Indian rupee weakened for the fourth straight session versus the dollar after the local equity markets fell.
The Sensex fell 2.63%, or 722.77 points, to close at 26717.37 points. Since April 13, the Domestic Stock Markets have been reduced by over 2,200 points in the expectation of weak monsoon, the off profits and the threat of the AMT on foreign funds.
Gold rose 0.39 per cent to Rs 26,984 per 10 grammes in futures trade today on the Multi Commodity Exchange, as bullion players created fresh positions, taking positive cues from global markets.
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