Prices of gold futures climbed to fresh highs of 3 months on Monday on speculation that weak economic outlook in the US It means that the Fed may delay raising interest rates.
The Fed on Wednesday will be announced the minutes of its last meeting. Data last week showed consumer trust fell over two year and factory production stalled in April.
The dollar pushed higher, but stayed on the defensive after data on Friday showed industrial output fell for a fifth straight month in April and another report showed consumer trust deteriorated to a seven-month low this month.
The Fed said industrial production fell 0.3% after a revised fall of 0.3% in March. Economists had forecast increased by 0.1%.
Gold futures for June delivery were at $1,227.8 a troy ounce, after touched of $1,231.9, the highest since Feb. 17.
Bullion for immediate delivery jumped as much as 0.6 percent to $1,232.44 an ounce in London.
Profiteers net long position ‘jumped 14 percent to 36,150 futures and options from May 12 US data Commodity Futures Trading Commission demonstrated. That was the third advance in four weeks and the biggest gain since April 7.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 93.619, up 0.52% from the previous close of 93.135, still not far from Friday’s four-month lows of 93.2.
Indian benchmark rupee opened at 63.47 per dollar and touched a high and a low of 63.47 and 63.74, respectively in intra-day trade. The rupee closed at 63.72 per dollar, down 0.32% from its previous close of 63.52 due to dollar demand from oil companies and lower foreign inflows.
Taking positive cues from overseas markets, and increased demand at domestic spot markets for the wedding season, too, supported the gold upside.
At the futures market Multi Commodity Exchange, gold for delivery in four-month August moved up by Rs 78, or 0.28%, to Rs 27,775 per 10 grams.
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