Gold futures rose in morning trade on Wednesday, supported by a drop in the dollar, as investors anticipated a wave of potential risk events that would fuel volatility and uncertainty as subdued demand for safe havens.
Gold futures for August delivery on the Comex Exchange fell $7.81 or 0.59%, to $1,289.82 a troy ounce.
MCX Gold was down 0.31 per cent, or Rs 92, at 29,475.
Gold fell from its lows as the US dollar fell from its previous gains against the euro, which fell to its lowest level in the previous session after a report from Bloomberg showed that the ECB will lower inflation expectations for the next three years to 1.5% amid a decline in energy prices .
The report comes one day before the European Central Bank’s interest rate decision and press conference from the European Central Bank President Mario Draghi, who said in a speech on Monday that the stimulus and support measures are still needed to boost inflation.
Latest holdings in SPDR Gold Trust, on Tuesday rose 0.49 per cent to 855.16 tonnes.
Geopolitical fears continued to emphasize moves in precious metals, as investors prepared for possible adverse hurdles on Thursday that could hinder risk appetite and move sentiment towards safe havens such as gold.
While the survey experts expect that the Conservative Party in Britain, Prime Minister Theresa May will get enough seats to fend off competition from the Labor Party, investors are still worried that the Conservative Party may not significantly expand as much as hoped in the majority.
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