Gold prices on Thursday have held on to most of their gains and are trading almost steady after rising as much as 1% in the earlier trading day. This has come off as dollar has lost in value after hitting a 16-month high early this week.
At 0453 GMT, spot gold was almost steady at $1,211.12 per ounce. US gold futures climbed higher by 0.1% to $1,211.7 per ounce.
The continuous decline in the US dollar against a basket of 6 major currencies will bring back the lost sheen in gold as a safe haven investment. The dollar index which measures the strength of the US currency is trading with a loss at 96.84.
Interestingly, high interest rates in the US provide strength to the greenback and also push bond yields higher thus fading the appeal of non-yielding gold investment.
Gold recorded its peak price in April and since then it has lost close to over 11% in price due to investors' increased inclination towards dollar.
In the domestic markets, gold in 24 and 22K is priced for Rs. 32,400 and Rs. 30,560 per 10 gm, respectively.