Gold prices rose yesterday and were hovering close to their highest in more than a week touched in the previous session as the dollar eased on weak US economic data, with the metal gaining further support from higher oil prices.
Spot gold was up 0,3 percent at $1,300.47 per ounce, as of 0753 GMT. The metal touched an intra-day high of $1,303.61, highest since March 28, in the previous session.
US gold futures were up 0,1 percent at $1,303 an ounce.
“The dollar is not able to sustain above the 97 level and gold is also getting support from rising crude oil prices,” said Renisha Chainani, head of commodity and currency research at Monarch Networth Capital in Ahmedabad, India.
“A rise in crude oil prices leads to speculation that inflation will rise and gold is considered as a hedge against inflation. So, when crude oil prices rise, gold will rise.”
Oil prices rose to their strongest level since last November.
The dollar sagged to a level last seen on March 28, thanks to weak US economic data and gains in commodity-linked currencies, which drew support from an extended surge in crude oil prices.
Orders for US-made goods fell modestly in February and the manufacturing sector is slowing amid rising inventories, data showed on Monday.
The US non-farm payrolls data on Friday also signalled a slowdown in wage growth and job cuts in the manufacturing sector even as employment accelerated.
“Decline in wage inflation takes the pressure off the US Federal Reserve and lets it remain dovish and delay rate hikes or maybe switch gears, and that’s supportive for gold,” said Ilya Spivak, a senior currency strategist at DailyFX.
Lower interest rates reduce the opportunity cost of holding the non-yielding bullion.